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.
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.