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| Your questions are very common for the newly self-employed. We’re accustomed to the company that employed us paying us a salary, so we tend to think in those terms. You’ve got to shift your thinking a bit. The only people (if any) who will earn a salary from your brand new software company are those you employ. When it comes to you – you are the company, if that makes sense. Or to put it another way, the company is you. And you can’t be an employee of your very own sole proprietorship.
You (you are the business, remember) bring in money from clients. You pay your expenses from that money. Profit is what’s left. This leftover profit is what you’ll pay taxes on to the IRS. This profit is your income. This profit (and your resulting tax bill) isn’t impacted by how you take money out of your business, if you take it out, when you take it, or how much you take out. If money is there, you can leave it or take it out as you see fit.
Good luck with the new business! Perhaps you’ll be the next Microsoft!
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