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"Unprofitable" startups will pay taxes on revenue that isn't really "profit" If a b2b startup has some contracts which total $1 million per year in sales, but
by pcthrowaway 3y ago
"Unprofitable" startups will pay taxes on revenue that isn't really "profit"
If a b2b startup has some contracts which total $1 million per year in sales, but their dev expenses are also $1 million per year, you're right, the startup is unprofitable. But now they'll still have to pay taxes on the $800K of sales after their 20% immediate-year deduction for dev expenses
- gizmo 3y agoOnly if the startup wishes to take advantage of R&D credits or otherwise wants to treat dev expenses more favorably than other expenses, which is optional. Otherwise revenue - expenses < 0 and no taxes will be due, like before.
- meetingthrower 3y agoThis. You can't have your cake and eat it.
- galaxyLogic 3y agoI think you MUST have your cake before you can eat it :-)