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

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.)