Thread: Profit
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Old 12-30-2012, 10:42 PM
Duekster Duekster is offline
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Join Date: Jan 2007
Location: DFW, TX
Posts: 7,969
Well Florida has a longer working season but you get the idea.
One word of caution, do not put too much faith in the CPA. They have no guts and deal in the past.

You need to learn your business. There are often some free account classes for start up businesses and free counseling through SCORE and Small Business Development programs.

Profit is what you make off an investment. If you had a job and earned a wage that is not profit, nor is your labor that you put in the company.

I do not know your business structure but look at the different types and how the IRS treats the income to get an idea of what is wages and what is profit. If you were a C Corp or taxed as one as a LLC then you would set a wage for yourself... any extra bonus or dividend would be taxed as a capital gain where as the wages would be taxed as wages.

Clearly most start ups do not have the ability to set up wages at first. There are a lot of considerations about what type of business to even set up but IMHO anything but a DBA sole proprietor is good if you have any assets at all.
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