Posts by redscout61

vividstag31 said:So, you basically just said the exact thing that’s wrong here.
You can't really write off $1667 if you've still got $667 left in your account.

Even then, those $667 are only taxed as profit if you don't have other expenses—which isn't really possible, since you'll definitely have at least some depreciation if you're running an LLC.

Get what I mean?

That $300 sales tax you pay at the store ends up going to some other corporation anyway. It doesn't go straight to $300 the government; it's more like 22% of whatever margin the retailer tacked on. So when you trim that down a bit, it's not even that much. I'm telling you, the real headache is actually getting paid—collecting on invoices. Especially if you run into scammers.

It’s an old rule: you just have to DIE and PAY TAXES. That's pretty much the only absolute in life.

It's the same way everywhere in the world.

The whole issue facing me, you, and everyone else in small business is that the margins—or the potential to make money—are just too slim compared to what we actually need to live.

If business isn't moving, it takes a lot of guts to just shut the company down rather than scraping by and waiting for someone else to step in.

We’re talking past each other again, I guess.

Long story short, let me recap.

$3333

$8,200 your take-home
$1,800 sales tax *

out of $8,200
$3,000 your salary
$2,500 social security, Medicare, etc. *

what's left in the account
as profit $2,700
$2,000 in the bank
$700 corporate tax *

$5,000 = your salary plus profit after taxes
$5,000 = sales tax, social security, Medicare, and all that

You head to the store with your money (salary and profit)
The retail price includes sales tax
we know how much that is ($300) and that's that.

I'm not against it, honestly. I get that
everyone plays their part
you know, like a landlord and a tenant, etc...

The problem is that instead of treating us with respect, the people handling the money act like they own the place, not like they're serving the public—and there's a huge difference, at least how I was raised.

One more thing that drives me crazy.
My company has a vehicle used strictly for work, but even now they only recognize 30% as an expense, while 70% counts toward profit. Fine.
But here's the question: I wonder if those high-level bureaucrats—the ones acting like they're untouchable—drive their official cars to the gas station and charge 30% of the fuel to the taxpayers (the state, the county, the city, etc.) and then pay the other 70% out of their own pockets.

vividstag31 said:So, the question was actually about a small business—though I guess you went a bit deeper with your answer. That’s why I mentioned that whole sales tax thing after the invoice gets paid earlier.

You can't just look at it that way—it's not that simple. First off, serious people don't treat sales tax like it's part of their profit margin... so I'll just assume you meant the invoice was for the service itself, meaning there’s no markup involved, I guess. $3333 Plus sales tax, I guess—so that'd be the total. $4067.
So that $2,200 just goes toward sales tax—it basically just passes through your books, I guess.
I guess those guys... maybe? $3333 what's even left after you pay your salary—I guess. $1000 Maybe just cash—hand to hand, I guess. $600 Just for taxes and all that other nonsense—same as anywhere else in the civilized world, I guess. So you're stuck with it. $1733.
If you just write them off like that—I guess—you're gonna end up paying more on your taxes at the end of the year. $1733 So, you’re looking at either a 25% or 35% corporate tax rate—kind of depends on how much profit you actually pull in, I guess.
..........

I see you totally get what I'm saying—basically, we're on the same wavelength, thinking the same things and stressing over the exact same stuff, I guess.

I'm not saying I keep the sales tax as profit—I’m just talking about what the whole job actually ends up costing the client (if you're even dealing with an individual, I guess). $3333.

So, this is more or less how I see it—my rough take, anyway.

Value of the job—I guess.
10 $0.00
from that—I guess.
$600 Sales tax—it’s always a headache, I guess.
$8,200—that’s your take-home, I guess.

Starting at $8,200—I guess.
Just pay yourself—you'll get the cash straight to your pocket, I guess.
3000,00
So much for using the company laptop for fun—that's gone now, I guess.
5500,00
So, what does it even mean when $2,500 just... vanishes like that—gone from here and gone from there? I guess it's just lost.

At that point, you had like 2700 left in your account—I guess.
which one did we say you're keeping as a win—I guess?
I mean, obviously the tax prepayment or corporate tax is only $700—so you're looking at $2,000, I guess.

Roughly fifty bucks total—fifty to you and fifty to the government, I guess.

So, my wife, the three kids, and I hit up a big grocery store—you know how it goes, grab this, need that, kid wants this... by the end, you’ve basically burned through everything you had left. You add it all up and it’s like $4,100 out of my pocket, plus another $900 in sales tax to the government. Just... yeah.

It’s getting a bit ridiculous—if I’m the one stuck footing the bill for everything from food to clothes for five people in my family, it feels like a lot. It's just frustrating seeing these bureaucrats blow through what's basically my money.

manager said:Well, if you’re just running a sole proprietorship, you only pay taxes once the invoice actually gets settled.

True, but I’m running an LLC.

manager said:Look, you really need to wrap your head around the whole tax system—everything from sales tax to corporate income, depreciation, overhead, all that stuff—before we can even debate what works better than what.

I guess we can talk all we want, but honestly, I doubt it changes anything in the system. Maybe we can just help each other out with advice so nobody falls into the same traps the government sets for us.

You know how it goes... everyone learns from their own mistakes, but they think they're smart by watching others fail.

manager said:If you can't adapt, you'll end up being an employee working for some big boss who can. That's just how the world works everywhere. The biggest issue here is that people think opening a business means instant wealth. It's a joke.

I work for myself, so I'm both the employee and the boss, and I don't mind that at all. The real issue is that to pay myself a decent $3k, I have to hand almost that same amount over to people who—like I said before—just sit around waiting for government handouts.

manager said:Hey there!

Hey, back at ya.

BTW, since you seem to know your stuff, have you ever tried tracking the actual cash flow?
Like, say you pull in $10k from a job $0.00. You pay yourself a $3k salary $0.00, and let's say the rest is profit. Take your wife and kids and go to a mall with that salary (and the profit, if you're feeling flush) and buy whatever you need. At the end, calculate how much of that $10k actually went toward your life versus how much vanished into the Treasury and other federal agencies.

Obviously, they'll just use that budget deficit to bail out failing corporations or fund some buddy's special project.

vividstag31 said:Yeah, yeah, redscout61—but the legal system doesn't really have much to do with just starting a small business. That’s what I was getting at. It matters a ton when you're trying to protect yourself or collect unpaid invoices, but that wasn't even what you asked.

Fair enough. I agree with everything there. Like I said earlier, the legal side of things isn't really an obstacle to actually launching a startup.

I just wanted to point out that our legal system is one of the biggest drags on economic growth.
One of the most annoying parts is when a client decides they don't want to pay—or just can't—and you're stuck chasing them through the courts just to get what's yours.
The second you send that invoice, the IRS expects their cut of sales tax. So you're already screwed because you haven't been paid, then you've basically overpaid on taxes based on a bad estimate, and then at the end of the year, they look at your books, call it profit, and demand income tax... even though you haven't seen a dime.

redscout61 said:FORWARD OR BACKWARD? THAT'S THE QUESTION

.... Why? Because what looks like progress to one person might look like a step back to someone else?

It’s pretty subjective, I guess.
Take a cancer cell, for instance.
It mostly just moves erratically.
From its own perspective—if you could even talk to it—it’s moving forward, and you probably wouldn't be able to convince it otherwise.
But when you look at it from your perspective, where moving backward is basically synonymous with losing ground, it’s hard to accept that someone could be "advancing" by retreating.

Apply that logic to the current mess we're dealing with in the States, assign everyone their roles, and it all starts making sense.
That's how you end up with that classic excuse: "The government is great, it's just the people who are the problem."
Well, yeah—it’s a problem if they’re the ones who picked this administration in the first place.

vividstag31 said:That’s why, my clueless friend, you won't find anything else like this anywhere else. In capitalism, there are really just two kinds of people: bosses and peasants. Peasants work for the bosses. Honestly, you're better off just accepting that—it's easier for everyone involved.
In any country, if you don't have capital, you aren't starting a business or even a small LLC. And the cash you have to shell out just to get things running stays with YOU as the owner, not the government.
It's got nothing to do with the legal system.

Anyway, I'm pretty much on board with what you're saying. As far as starting businesses goes, the current setup makes it even harder to actually get an LLC off the ground. It honestly drives me crazy seeing these kids who basically "work" at some random spot while living off taxpayer money—they figure out a way to leverage their connections or whatever, grab a decent gig, and then suddenly they've got a business in their own name. They make a quick buck, shut it down, or just put it on ice until the next election cycle.

Meanwhile, you're stuck out there grinding and trying to stay competitive in a rigged market.

The legal system is a joke, for sure.