Ok, tax time around. LLC S-corp. My wife has her W2 and I do have mine. The profit is $100k. My tax accountant says I have to pay our tax bracket on this profit. In our case 30%. So $30k in taxes.

I get that I have to pay taxes but what is the best way to deal with this? I can’t predict the year end profit so I don’t want to pay quarterly.

How do you deal with this?

  • lil_cricketboi@alien.topBEnglish
    1·
    10 months ago

    The business pays 30% on its profit or that’s what you pay for income tax to pay yourself? I always thought it was that if your company spent $10,000(labor and material) and made $30,000 you would pay a small franchise tax on the 30k(sales tax aside) and that remaining ~20k can be spent(or saved) relatively tax free if it stays within the company. Is there a year end tax reporting needing to be done that’s dependent on profit? Even if it stay in the company bank account.

    I thought the big tax happened when you pay yourself.

    Someone help me understand please.

    • Zealousideal-Milk907@alien.topOPBEnglish
      1·
      10 months ago

      That’s what I thought to but that is not the case per my accountant. You pay taxes on profits regardless if they are staying in the company or not. But on the other side you can carry forward losses.