Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: How do I manage the profit of a successful website?

news.ycombinator.com

Post reply on HN
Print view View original

31–40 of 143 posts

Re: Ask HN: How do I manage the profit of a successful website?

#31

Post by Cwizard »

capableweb wrote: post #11
anemic wrote: post #7

How about donating to charity? If you don't need the money, there are people in the world who are struggling to get clean water. Spend some time to verify that your money goes to a good cause and not to scammers. You could start by donating to a local sports team to buy equipment to those who can't afford if, for example. Then go see their games to see what you've accomplished.

Donating excess profit (from self-run business and/or employment) to local non-profits/small organizations is the single most satisfying thing I've ever done. Not only does it feel great to donate the funds to them, but to be able to afterwards tell the change you're able to help them achieve is invaluable.

Do you have any advice on finding/selecting the right charities? Each year I give away a portion of my salary but always struggle to find good charities to give to. Perhaps I am overthinking it, but any tips on this would be appreciated.

Re: Ask HN: How do I manage the profit of a successful website?

#32

Post by dr_dshiv »

ryanmercer wrote: post #28
markvdb wrote: post #12

The HN audience, friendly as it is, is probably not your best advisor on these matters. Your accountant or tax adviser should have advised you about this ages ago. Either improve communication with your current accountant or fire him and get a new one able to properly answer this question.

A million times this. Some randoms on a website are the last people you want to take financial advice from, especially when that financial advice could potentially lead to a very hefty tax bill and/or criminal charges.

Baloney. You need to know what to ask your accountant for. That's why it is useful asking on HN.

Re: Ask HN: How do I manage the profit of a successful website?

#33

Post by dr_dshiv »

meetingthrower wrote: post #5

If you have it as an LLC, any profits will pass through to you through your schedule C, and you will be taxed at regular income tax rates. Your accountant will help. But tax optimization can REALLY matter, and as a small business you have massive opportunities to very legally and ethically optimize your business and tax. Top of mind, what you should really consider is: a) setting up a 401K under the business to shelt…

Super helpful reply, thank you.

Re: Ask HN: How do I manage the profit of a successful website?

#34

Post by ryanmercer »

dr_dshiv wrote: post #32
ryanmercer wrote: post #28

Earlier quoted context omitted.

A million times this. Some randoms on a website are the last people you want to take financial advice from, especially when that financial advice could potentially lead to a very hefty tax bill and/or criminal charges.

Baloney. You need to know what to ask your accountant for. That's why it is useful asking on HN.

A competent account, with the information OP gave and a little more, can give OP the best advice for their situation in their city/state/country.

Re: Ask HN: How do I manage the profit of a successful website?

#35

Post by toomuchtodo »

Contact a tax advisor/accountant, ask them if you should elect s corp treatment, also ask what a reasonable salary draw is to avoid IRS tax evasion scrutiny. Defer to their advice over HN’s; they’re the tax/finance professional on the hook for given guidance.

Re: Ask HN: How do I manage the profit of a successful website?

#37

Post by Rastonbury »

Serenacula wrote: post #30
meetingthrower wrote: post #5

If you have it as an LLC, any profits will pass through to you through your schedule C, and you will be taxed at regular income tax rates. Your accountant will help. But tax optimization can REALLY matter, and as a small business you have massive opportunities to very legally and ethically optimize your business and tax. Top of mind, what you should really consider is: a) setting up a 401K under the business to shelt…

I don't think the spirit of the question was "how do I avoid paying taxes", but more along the lines of "what the hell do I do with all this money I don't need?". I would suggest giving it to charity, OP. My mother always said even poor folks should be giving at least 15% of their income to charity, but if you have more than you need, no reason not to increase that number.

Because money is fungible, you can pay more tax or you can give more to charity. The answer is very pertinent because of this

Re: Ask HN: How do I manage the profit of a successful website?

#39

Post by Clubber »

Serenacula wrote: post #30
meetingthrower wrote: post #5

If you have it as an LLC, any profits will pass through to you through your schedule C, and you will be taxed at regular income tax rates. Your accountant will help. But tax optimization can REALLY matter, and as a small business you have massive opportunities to very legally and ethically optimize your business and tax. Top of mind, what you should really consider is: a) setting up a 401K under the business to shelt…

I don't think the spirit of the question was "how do I avoid paying taxes", but more along the lines of "what the hell do I do with all this money I don't need?". I would suggest giving it to charity, OP. My mother always said even poor folks should be giving at least 15% of their income to charity, but if you have more than you need, no reason not to increase that number.

Sadly, many charities are borderline fraudulent. Always ask what their administration fee is. I remember getting a call on Memorial Day asking for donations to veterans. I asked what the administration fee was and he said 90%. I said, "No, I mean what do you take to process these payments and make the calls?" He repeated, "90%." I was floored.

Anyway, to answer the OP's question, you need to save at least some of it. Just because you are making money now doesn't mean you will make it in the future. Plan for a life-changing event where you are unable to make money, or even worse, you are reliant on others to take care of you. Best to have something stored away, preferably an appreciating liquid asset so you can get to it fairly quickly.

Re: Ask HN: How do I manage the profit of a successful website?

#40

Post by ryanmercer »

Cwizard wrote: post #31
capableweb wrote: post #11

Earlier quoted context omitted.

Donating excess profit (from self-run business and/or employment) to local non-profits/small organizations is the single most satisfying thing I've ever done. Not only does it feel great to donate the funds to them, but to be able to afterwards tell the change you're able to help them achieve is invaluable.

Do you have any advice on finding/selecting the right charities? Each year I give away a portion of my salary but always struggle to find good charities to give to. Perhaps I am overthinking it, but any tips on this would be appreciated.

Find some charities that interest you then hit up a site like https://www.charitynavigator.org/ and see if they are in the database, if they are see how they are rated, make sure they aren't spending 95% of what they raise on salaries and advertising expenses, etc.
Post reply on HN