Comment by 1auralynn

I'm no expert, but my understanding is that any expense related to software development would have to be amortized regardless of company structure or employees.

So, two scenarios: a) If you were a sole-proprietorship, you made $100K revenue, paid $10k in AWS fees, you would pay personal taxes on $98k (100 - 10/5) that year. b) If you paid a contractor $50k that year, you would pay taxes on $88k. (100 - 10/5 - 50/5).

In the past taxes base would be a) $90k (100 - 10) and b) $40k (100 - 10 - 50). So yeah larger tax implications for having employees, but the same would be the case with any expense.