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Mistakes You Should Never Make

sethbannon.com

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Re: Mistakes You Should Never Make

#241

Post by tedsanders »

pyre wrote: post #183
matwood wrote: post #108

Earlier quoted context omitted.

Interesting about your grandfather. Mine taught me a similar integrity lesson when I was a kid. Back when there were payphones I would always check them for spare quarters. One time when I was with my grandfather I checked a phone that has broken and dumped ~ $6 in change out. I pulled all the money out super excited about my find. He explained it wasn't mine and when we got home he mailed the local phone a check for…

Two thoughts: 1. Was that really the phone company's money? My first thought on hearing that story was that the $6 in change was from people putting money into the broken phone, realizing it was broken, and leaving without their money. Does the phone company really deserve money that the phone 'eats' when it doesn't deliver the service that people are giving it money for? 2. If you sent the phone company that $6 toda…

Two thoughts in response to your thoughts:

1. Sure, it's possible the phone company didn't "deserve" the money (perhaps, as you say, the phone failed to make calls). But it's just as possible the phone company did "deserve" the money (and that the phone made calls but refunded the change). There's no way to know what happened for certain. However, what is certain is that the kid did not earn or "deserve" the money.

It also becomes quite dangerous to reason based on who "deserves" something. Am I entitled to rob any person who has not lived a moral life by my standards of morality? (No.) :)

2. I think this is hyperbole and a total strawman. Mailing $6 to a phone company will not result in a lawsuit. Do you actually think this would happen? I worry that attitudes like this come from the selection bias in the media, where rare outrageous stories are reported far more often than commonplace stories, resulting in shifted perceptions of reality. If you would care to bet or fund me, I would be happy to send $6 to a phone company. I highly doubt that criminal charges would be filed against me.

Your thoughts seem to be trying to rationalize taking money that isn't yours. I think this is precisely the attitude that his grandfather was hoping to avoid instilling in his grandchild.

(P.S. I mean no offense or snobbery, in case any came across.)

Re: Mistakes You Should Never Make

#242

Post by jacquesm »

personZ wrote: post #149
matthewmacleod wrote: post #10

Wow - "Oops, we forgot to pay payroll taxes for three years" isn't good. How does nobody notice that? But lessons learned and all that. I can't stress enough (at least from having run a small business) that accounting is the number one thing to get correct from the get-go. It saves such an immense amount of time, money and stress later on.

It's rather surprising that the IRS wasn't dramatically more aggressive about this. Every year they had people submitting tax returns claiming taxes paid that weren't paid, for years. I would have expected the IRS to have searched the Earth for this company.

The address was wrong. Probably a mistake, but that trick has been used on purpose as well.

Re: Mistakes You Should Never Make

#243

Post by roel_v »

afro88 wrote: post #207
sethbannon wrote: post #198

Earlier quoted context omitted.

I see that you made this HN account only to comment on this post. I've learned that getting into a back-and-forth with anonymous posters on HN is never a good idea, but I'll respond just this once. 1. You're absolutely right. I majorly screwed up here. I say so as much in the post. 2. I think people can reasonably disagree here. An example: a potential customer asks a sales guy during a demo "...and will we be able t…

> 2. I think people can reasonably disagree here. An example: a potential customer asks a sales guy during a demo "...and will we be able to export a list of our users?" Answer: "yes, absolutely". The customer signs. The sales person then runs to dev team and says "we need to build this export functionality before they launch". Did the potential customer think that feature already existed? Probably. Is anyone being h…

" It's honest, and frankly sounds more impressive to the client."

LOL, how much have you sold in your career? Because really, it seems like you've never had a sales meeting at all.

Re: Mistakes You Should Never Make

#244

Post by jacquesm »

tomp wrote: post #155
pjungwir wrote: post #125

Earlier quoted context omitted.

Harvard Extension School is an adult education program, like night classes. Your teachers may be Harvard faculty (but never were in the 7 classes I took there), and the other students are not Harvard undergrads. Also there is no application: they take anyone with a credit card. (There may be an application if you want to earn a degree rather than just take desultory classes; I don't know.) That's all not to say the c…

So what does "getting into Harvard" mean - getting into Harvard College? What about the rest of colleges besides Harvard College and Extension School?

It means being accepted on your merits, rather than on your ability to pay a few hundred dollars.

It also makes you part of a relatively small crowd that tends to use that particular fact as a credential. At least they earned that, the OP did not.

Re: Mistakes You Should Never Make

#245

Post by jacquesm »

tptacek wrote: post #128
[deleted] wrote: post #122

[deleted]

This is probably not great advice, because the state and federal IRS (reasonably) get pissed when you misclassify FTEs as contractors, and there are penalties if they decide that's happened.

Not only are there penalties, it could be construed as an attempt to shift the tax liabilities onto people that thought they were employed, not freelancers.

Re: Mistakes You Should Never Make

#246

Post by jacquesm »

danielweber wrote: post #71

No matter how smart you are, the only way it makes sense to do your own taxes is if your business is taxes. Otherwise, hire the woman who spent years learning this stuff and devotes her entire cognitive load to the task to do it for you.

Absolutely. And then you still check on them to make sure it is all done 100% right. You are responsible.

Re: Mistakes You Should Never Make

#247

Post by cthulhuhodor »

forgottenpass wrote: post #152
dreamweapon wrote: post #55

Earlier quoted context omitted.

Or on another, much deeper level it boils down to: "OMG look we're so HAWT, we're co-founders after all, not gutless employees, and we're only in our 20s, doing all these amazing things, and we have this cool office and all these smart, hip people working for us.. and umm, budgets? due diligence? CPAs? What are those?"

Woah, slow down there bud. You're not allowed to have negative opinions on anything a entrepreneur does on Hacker News.

god bless you both!

Re: Mistakes You Should Never Make

#248

Post by maxerickson »

jacquesm wrote: post #235
will_brown wrote: post #75

Earlier quoted context omitted.

As a former transactional/commercial litigation attorney I too would see this issue regularly. One interesting "hack" I would see clients do regularly as owner/employees, they would minimize their own salary to avoid payroll taxes, maximizing their distributions (distributions are not subject to payroll taxes). Unfortunately for them the IRS accounts for this hack , and if an IRS audit finds the salary isn't reasonab…

In NL we actually do have such a 'bright line', a very reasonable amount that anybody in the hot seat is required to pay out of their business on an annual basis as a salary. If the business is not doing well you can negotiate that down to ridiculously low levels provided you do not borrow from the company at the same time . That last bit is the bit that bites, many business owners already have a line of credit with…

In the U.S., if you pay yourself the wage base limit, then you at least won't be delinquent for any social security taxes:

http://www.irs.gov/taxtopics/tc751.html

So people doing high value software type consulting are probably playing games if they take that much compensation but oops on fully paying those particular taxes.

Re: Mistakes You Should Never Make

#249

Post by tptacek »

bravo22 wrote: post #238
cullenking wrote: post #182

Earlier quoted context omitted.

Sure, but you just mentioned an unreasonable salary. If the median is $100k, then that's reasonable, and the person only gets to avoid SS and medicare on any additional profit. I operate as an s-corp and pay myself a reasonable salary, matching that of the salary I could get in the current job market in the area I live in. Anything I clear above this is only taxed with my regular taxes. If I was running a C-Corp inst…

Exactly. You could pull in sometimes 250-500K as a consulting company, specially if you outsource some aspects of projects. S-Corp is ideal for that.

The FICA cap is 115k.

Re: Mistakes You Should Never Make

#250

Post by jlevy »

As internal counsel for YC, it was very upsetting to learn about the ongoing troubles at Amicus. It was particularly distressing to hear about the payroll tax issues, given that YC has funded excellent companies that specialize in accounting and payroll for small businesses, such as Indinero and Zenpayroll. The tone of Seth's post suggest that YC has supported Seth in all of his recent actions. That is not true -- YC supports its companies through good times and bad, but we do not support illegality. For example, in paragraph 3 Seth writes that PG looks for founders that are "naughty" and writes about levels of rule-breaking. YC's principal tenets are to "make something people want" and "talk and listen to users/customers" -- YC may promote a culture of disruption, but that does not mean neglecting payroll taxes and breaking rules.
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