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I don't pay myself anything because I'm currently the only one funding the company. As it's a C-corp, that would result in double-taxation of my own dollars in

by drone 13y ago

I don't pay myself anything because I'm currently the only one funding the company. As it's a C-corp, that would result in double-taxation of my own dollars in theory (and in an LLC it'd make no effing sense). I earned enough selling my last two companies to afford to live off of savings for a couple of years, fund retirement account, and fund two projects I'm currently working on. I also occasionally do consulting which pays very well by the hour, when need be. Single-income family with no kids and minimal debt, small house in a working-class neighborhood, standard cars. No funny tax stuff, because it doesn't really exist. That is to say, outside of re-investing capital gains offsetting when taxes are due (1202), and current deals on off-setting future capital gains (1045), there's nothing that the average employed person couldn't exercise regarding write-offs.

SDGT 13y ago
If you can get yourself another employee, becoming an S-Corp will allow you to take a meager salary, charge rent to the business, and use draws on any other cash you might need from the corp in a pinch. S-Corp is pretty much synonymous with "I have an actual payroll"
- drone 13y ago
  An S-Corp is little different than an LLC in that sense in that it's a pass-through, and an LLC may make more sense in some situations. (And certainly cheaper to get rolling properly than an S-Corp.) But, it still wouldn't matter in this case. There is no money, except that which I put into it. If I were to take a partner retainer from that same pool of cash, or pay myself a salary via an S-Corp, they would both show as income at the end of the year, even though I just moved money from one pocket to the next. If one is in the same situation, observe how much you need to cover expenses, set that aside, and invest the rest - do not try to be funny with paying yourself out one side and looking for losses on the other.

by drone 13y ago

SDGT 13y ago

If you can get yourself another employee, becoming an S-Corp will allow you to take a meager salary, charge rent to the business, and use draws on any other cash you might need from the corp in a pinch. S-Corp is pretty much synonymous with "I have an actual payroll"

drone 13y ago
An S-Corp is little different than an LLC in that sense in that it's a pass-through, and an LLC may make more sense in some situations. (And certainly cheaper to get rolling properly than an S-Corp.) But, it still wouldn't matter in this case. There is no money, except that which I put into it. If I were to take a partner retainer from that same pool of cash, or pay myself a salary via an S-Corp, they would both show as income at the end of the year, even though I just moved money from one pocket to the next. If one is in the same situation, observe how much you need to cover expenses, set that aside, and invest the rest - do not try to be funny with paying yourself out one side and looking for losses on the other.