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He's likely an llc taxed as an S-Corp. You don't pay taxes out of your business, profits after write offs are added to your return with a K1. You're likely thi
by sbjustin 8y ago
He's likely an llc taxed as an S-Corp. You don't pay taxes out of your business, profits after write offs are added to your return with a K1. You're likely thinking of a C-Corp.
- maratd 8y agoYes, that's exactly it. As an S-Corp the corporation doesn't pay any taxes. Well, in my case my state (New Jersey), has a minimum tax based on revenue. I pay that, but it's minimal. If it really bothered me, I could re-incorporate as a Delaware or similar LLC. All profits are passed to your individual return and you pay taxes on that.
- mathrawka 8y agoWith the K1, you will be adding the passed through income to your personal income and still paying tax on it. I'm not seeing the benefit of an S-Corp here.
- maratd 8y agoSee my comment here: https://news.ycombinator.com/item?id=19527078 https://news.ycombinator.com/item?id=19527078