Re: Re: There are 2 kinds of people who make 250K or more
Of course you are taxed on your net (including salary and company profits) after all the deductions you can muster up. It's the higher tax bracket that hurts you.
Imagine you didn't take as much of a personal salarly from your company as would normaly because of low cash flow from having to buy materials for jobs in progress at the end of the year continuing on to the next year. Well, the higher tax bracket takes away a lot of that money you were counting on for personal salary because your profits were higher. I also learned not to have large inventories of materials that get taxed also.