4 ms·

After you make about 375k, you have to pay 35% tax on every extra dollar of salary too.

by natnat 15y ago

deleted 15y ago
[deleted]
Nrsolis 15y ago
Source?
- dangrossman 15y ago
  The IRS, that's the top income tax bracket. They're listed in the form 1040 instructions if you want to see it on paper.
  - Nrsolis 15y ago
    Actually, I was referring to the assertion that you're in the 35% tax bracket when your salary hits ~375K. There is a lot of confusion in this area, especially when things like pass-through entities (like LLCs and S-Corps) are involved. Keep in mind that salary income from an LLC or from an S-Corp is also taxed by Soc. Security and Medicare (the dreaded ~15% self-employment tax) while capital gains from an LLC/S-Corp isn't necessarily subject to it. My point (and I do have one) is that the tax picture is considerably murkier when there is a business involved, be it a small one or a large one. Income taxes for salaried workers are a relatively straightforward matter. Income taxes for owners of businesses are another thing entirely. Deductions for business expenses are just a small part of that circus. The rules for businesses are a BIG part of the tax code and responsible for much of the shenanigans. If you think paying $250 for H&R block to prepare your return is steep, try paying something like $15-$30K for a moderately complex return for an LLC. (NOTE: My next-door neighbor just retired from the IRS after 30 years doing small business audits and my ex-fiance is a tax accountant. I've also owned and filed taxes for S-corps and LLCs as a principal. Shit just got real.)
    - dangrossman 15y ago
      I pay my accountant $275 to do the returns for my LLC. I keep my own books the rest of the year. I've been audited by the IRS and owed no money after the audit. Having a business doesn't automatically make things super complex. It's only complicated if your business is complicated.
      - Nrsolis 15y ago
        Do you have employees? How about lots of capital assets with varying depreciation schedules? Do you operate in a business that gets different tax treatment for operating in a special zone? Do you get income from many states? Your situation isn't typical. In fact, it's probably an outlier. I know performers who have to file 43 different state tax returns.

After you make about 375k, you have to pay 35% tax on every extra dollar of salary too.

by natnat 15y ago

After you make about 375k, you have to pay 35% tax on every extra dollar of salary too.

deleted 15y ago

[deleted]

Nrsolis 15y ago

Source?

dangrossman 15y ago
The IRS, that's the top income tax bracket. They're listed in the form 1040 instructions if you want to see it on paper.
- Nrsolis 15y ago
  Actually, I was referring to the assertion that you're in the 35% tax bracket when your salary hits ~375K. There is a lot of confusion in this area, especially when things like pass-through entities (like LLCs and S-Corps) are involved. Keep in mind that salary income from an LLC or from an S-Corp is also taxed by Soc. Security and Medicare (the dreaded ~15% self-employment tax) while capital gains from an LLC/S-Corp isn't necessarily subject to it. My point (and I do have one) is that the tax picture is considerably murkier when there is a business involved, be it a small one or a large one. Income taxes for salaried workers are a relatively straightforward matter. Income taxes for owners of businesses are another thing entirely. Deductions for business expenses are just a small part of that circus. The rules for businesses are a BIG part of the tax code and responsible for much of the shenanigans. If you think paying $250 for H&R block to prepare your return is steep, try paying something like $15-$30K for a moderately complex return for an LLC. (NOTE: My next-door neighbor just retired from the IRS after 30 years doing small business audits and my ex-fiance is a tax accountant. I've also owned and filed taxes for S-corps and LLCs as a principal. Shit just got real.)
  - dangrossman 15y ago
    I pay my accountant $275 to do the returns for my LLC. I keep my own books the rest of the year. I've been audited by the IRS and owed no money after the audit. Having a business doesn't automatically make things super complex. It's only complicated if your business is complicated.
    - Nrsolis 15y ago
      Do you have employees? How about lots of capital assets with varying depreciation schedules? Do you operate in a business that gets different tax treatment for operating in a special zone? Do you get income from many states? Your situation isn't typical. In fact, it's probably an outlier. I know performers who have to file 43 different state tax returns.