Comment by rco8786
3 years ago
This does seem rather...terrible. I am assuming in this case you outsourced the software development and paid someone $90k out of pocket?
3 years ago
This does seem rather...terrible. I am assuming in this case you outsourced the software development and paid someone $90k out of pocket?
Not an accountant so: Wouldn't taking a 90k salary be the same thing? (If you're building something new.)
Yea I just figured a bootstrapper is not going to take a salary in year 1.
But also seems like you could sidestep this by taking your salary as CEO rather than as a software developer or...something?
So I'm 6 years in as a bootstrapper.
Let's say I took a 500k year salary and paid 1M to my developers.
I always claim development as R&D.
I now need to pay taxes on (500k + .8 * 1M = 1.3M?) Despite only taking 500K salary? At some point I would owe more in taxes than I took in salary..
1 reply →
In the example I am giving it would be any expense related to "software development." So paying a salary to another person on your team (or 1099 income to a contractor), buying tools to aid in the development, anything at all really.
You're absolutely not required to categorize things like payroll as amortizable R&D.
To be clear I would love for this to be the case. I'm just curious though how you would justify saying a developer's salary is not a software development expense?
4 replies →
If they paid an outsourcing company, not direct hire through payroll, then there is no payroll?