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You really can't "cheat" with a C-corp. Your company's income is going to first be subject to corporate income taxes (30 to 35%). Then if you pay dividends, that is also taxed.

In other words, trying to skirt payroll taxes with a C-corp is going to end up with you paying more taxes than doing no hack. Hence, why the IRS rule only applies to S-corps which pass on their income and are not subject to corporate taxes.

Steve jobs effectively pays a 45% federal tax rate on income (35% corp on apple's income and then 15% long term cap gains on any shares he sells) -- so the IRS really doesn't care.



Well, apple ends up paying about 24% in corporate taxes, even though the corp tax rate is 35.


That's probably effective after all deductions, etc. 35% should be their marginal rate. So if the last $500k of income was converted into Steve's Salary their taxes should be dropping by 0.35*500k




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