Is it wrong to wish I didn’t have a profitable 2006 during tax time?
My last year of business was the best ever. Griffio has yet to hit the growth stage in its 3.5 year life, but every year has been better than the last. Growth, albeit small. And I feel blessed.
However, I owe the tax man a hefty sum this year. I owe him even more for being a profitable LLC (darn pass-through entity). It’s funny because as I was sitting down with my tax adviser, I realized how much money I owe Uncle Sam. In the process I caught myself saying, “Man, I wish I incurred more losses so I wouldn’t have to pay so much. Why did I have to be profitable?” That’s brilliant.
Although I don’t agree where all my tax money goes, I’ll pay my dues appreciating the many opportunities this great economy has created for me. Does knowing that make it any easier to pay taxes? Maybe. At least that’s what I tell myself.
If it’s any consolation, it gets worse when you’re paying off debt because not only do you not have the money, but whatever you put towards paying off debt counts as net income. In other words, let’s say my company brought in $500K last year. I spent $400K of it on business expenses, and $100K of it paying off debt, and I took zero salary. Guess what, unless I have a huge carry over from previous years, I’m going to have to pay income taxes on $100K, in spite of the fact that I didn’t make a dime myself.
The only solution to the problem of running your own business is make a lot of money. I’ve tried it all and nothing else works.