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

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

#41

Post by herlitzj »

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.

This. But I'd say don't just donate the whole sum. Talk to whatever accountant you find about creating a foundation and building an endowment. At $20k+ per month in seed you'll quickly ramp up to millions of dollars in the endowment and can build a foundaton that runs in perpetuity to enrich the lives of a lot of people less fortunate than you.

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

#43

Post by capableweb »

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.

> Do you have any advice on finding/selecting the right charities

I don't donate to international/national organizations but local ones, or even local businesses I like but who struggle with something. My tip for finding those is to participate in the local business/events landscape in your province/city/neighborhood, and talk to people.

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

#44

Post by lotsofpulp »

ryanmercer wrote: post #34
dr_dshiv wrote: post #32

Earlier quoted context omitted.

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.

One may not have the parents/friends/family to teach them how to know who a competent accountant is (or worse, a nefarious one). It is impractical to spend a lot of time interviewing many professionals, so forums can provide a quick way to cut through some noise.

Obviously, different forums are helpful for different things. But I would do both, utilize the power of the internet community and the services of a professional.

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

#45

Post by ghaff »

eaenki wrote: post #15

What a massive waste taking out 14k in salary. Almost everything can arguably be a business expense. Plus, any investment, just use SVPs or other methods where you don't incur taxation: would make no sense to take them out as salary just to invest them to ur name rather than a company's name. One day you'll pay the capital gains (which can themselves me minimized) and just buy a villa for business events, a range rov…

What you're advising sounds at least borderline fraudulent. Yes, they should absolutely be taking out any halfway reasonable business expenses (discuss with an accountant if it's not obvious). But I'm pretty sure buying a villa for the events that their 2 person company holds isn't in the reasonable expense category.

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

#46

Post by WORMS_EAT_WORMS »

ryanjmo wrote: post #27

Are you a solo owner? You need to take an s-corp election and you do not need to pay yourself that type of salary. At most you should pay yourself $54,000 a year. The reason is money that goes through an s-corp you don’t pay self employment taxes on. Salary you do. That is 15%. You wouldn’t need to pay yourself more than $54,000 without the government getting upset. Right now, based on $54,000 a month you are losing…

Between an S-Corp structure and having an i401k... definitely awesome for taxes. Nothing really competes for contractors.

I'd take the advice here of what dictates a "reasonable salary" with grain of salt however. $54k is not some magic cut off. Income only a factor in calculating it.

Here is official document. Purposely vague of course so it can be the IRS s discretion or a legal battle: https://www.irs.gov/pub/irs-news/fs-08-25.pdf

Just get an accountant. Pay yourself as low a salary as they recommend and document how you arrived there.

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

#49

Post by orangepurple »

Clubber wrote: post #39
Serenacula wrote: post #30

Earlier quoted context omitted.

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.…

You need look no further than the amount of $ given to San Francisco charities to help the homeless and actual results on the ground.

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

#50

Post by [deleted] »

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.

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