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I've asked that question of five or six Apple/IOS developers, some of them well known, and they've all just laughed at me. Worrying about coming close to $1mm/
by ghshephard 6y ago
I've asked that question of five or six Apple/IOS developers, some of them well known, and they've all just laughed at me.
Worrying about coming close to $1mm/annual sales is something precisely zero of them were worried about.
The answer to your question is, according to what I've read, yes - at $999,999 you owe $150K. At $1,000,001, you owe $300K. But - if you can get to $1mm, it's highly likely that $1.5mm, $2.0mm+, etc... are coming soon enough.
Many developers are focussing on $50k, $60k, type scenarios, where the 30% to 15% means enough money in their pocket to afford new development hardware, etc...
- s3cur3 6y agoAs I understand it, if you make $1 more than $1M, it's not that you suddenly owe an extra $150k in "back taxes," but rather that going forward, you'll be in the 30% "tax bracket." It's still a tax cliff, and therefore kind of problematic (if it's November 2021 and you've made $950k, you're strongly incentivized to shut down sales until the new year!), but as you say, that's a problem 99% of devs would love to have.
- ummonk 6y agoHow is it a tax cliff? My understanding is that after you hit 1 million they will start taking 30% of money that comes in after that for the rest of the year.
- chongli 6y agoThe issue is that if you cross the $1m threshold in the current year then the next January you don’t go back to 15%, you stay at 30% for the whole next year. So if next year your sales fall slightly below $1m, you end up paying $150k in extra Apple tax. Then the following year you go back to the 15% rate.
- ummonk 6y agoAh thanks, yeah that makes sense.