From a 'Mickey Mouse' degree to...

[AlvinG]

Ok AlvinG, you win.  You know everything, everyone else knows nothing. Maybe we should all leave, and you can run the forum. SMH.

FWIW, I wouldn’t take tax planning advice from AlvinG. I started preparing a very lengthy response and at some point asked myself “why am I doing this?”, so I deleted it. I will give the canned response when I don’t want to take the time answer a tax question: consult with your CPA before following this advice and if you don’t have a CPA, hire a CPA.

Any service your business provides a product on is taxed by the government, and then each employee is taxed on their income (as w2 you pay part of). This is why Elon Musk claims he pays him self nothing. Elon has a company with stocks, and puts up his stocks for a loan at an interest rate which he over competes. This is how he avoids taxes and has “income.”

Normal people? No.

My uncle by example is an Owner Operator. His income is $400,000/YR. He in reality nets closer to $100,000 after fuel expenses, maintenance, insurance, and taxes. Go try it out. This means if he had a fleet of 10 trucks, and was paying each driver $70,000/YR, he him self would net less than $300,000/yr if it was repeatable. Off a 4 million a year business.

Alas what you’re thinking of is based on a single person LLC. I wouldn’t consider that “running a business.” 
When you hire multiple employees, and run an actual business, the profit margin is much smaller. You pay taxes on company earned income, and then you pay % tax on the W2 income you pay your employees, and roughly 50% of social security. Don’t forget insurance and the other required licenses, and benefits including company matches. This is why most Fleet owners make their employees run as 1099’s, it affords more tax breaks for the business and creates real profitability.