For federal taxes, none. S-Corp profits go to shareholders and are taxed at individual rates.
How do I find out my individual tax rate?
Federal tax rate could be as high as 37%.
That depends on your personal situation. You’ll need to do some calculations or work with your CPA. Do you have any employees besides yourself?
Yeah, but not full time. I’ll just wait and see what the CPA says.
Rough guess: single, 60k W-2, $1M profit, in PA, you’d be looking at around $385k in income taxes.
With net profit, you’re looking at around 350k in federal and state taxes. You can save some by setting up a Solo 401k.
Let us know how it goes after your meeting.
Go into the meeting thinking you’ll pay 1.5% and you’ll be okay.
That’s really not helpful.
If you haven’t been paying estimated taxes, you’ll owe penalties and interest too.
One way to lower taxable income is by investing in oil and gas. You get immediate tax benefits and long-term returns. Plus, a portion of the income can be tax-free through depletion allowances. Check out startups like Fieldvest to find vetted projects in the U.S. for the best tax advantages.
Expect to pay around 37% to federal, 3% to PA, and 8.5% PA corporate tax. Max out all your tax-advantaged accounts if you can, like 401k and HSA.
How do you do the Mega Backdoor Roth for tax savings?
It’s post-tax money, so it grows tax-free. You don’t save on taxes now but do later.
Right now, I’m just maxing out my Roth.
You’re making too much money for Roth contributions now. Look up the income limits. Once your business nets $1M, you’ll have to change how you handle Roth contributions.
If you’re in California, there’s a 1.5% franchise tax on net profits. You’ll get a K1, and profits will be taxed at individual rates, which can go up to 37%.
Take some time away from work and start learning about this stuff! Check out LegalLees on YouTube and their products. It’s worth every penny.