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I'm not a tax professional, but corporations are taxed on income, not revenue. Tax preparation fees, travel costs, conference registrations, pension contributio
by alttag 15y ago
I'm not a tax professional, but corporations are taxed on income, not revenue. Tax preparation fees, travel costs, conference registrations, pension contributions, and other expenses of the "small business" author (computer, internet, mailing manuscripts) all turn in to usable money that isn't taxed. (Via income tax, I mean. In some cases property taxes may apply.) Expense tracking becomes more of a chore than for the average wage earner, but there are trade-offs.
The author's "corporation" can also manage paid salary from year to year to correlate with deductions or navigate tax brackets, further minimizing any double-tax effect.
- tdfx 15y agoI file as an S corp and deduct all of those expenses, as well. Except the money I pay myself as a salary is not counted as income on my business tax return... my understanding is that for a C corp, it would be.