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IRS Nails CPA For Copying Steve Jobs, Google Execs
theodp writes "It seems $1 salaries are only for super-wealthy tech execs. The WSJ reports that CPA David Watson incurred the wrath of the IRS by only paying himself $24,000 a year and declaring the rest of his take profit. It's a common tax-cutting maneuver that most computer consultants working through an S Corporation have probably considered. Unlike profit distributions, all salary is subject to a 2.9% Medicare tax and the first $106,800 is subject to a 12.4% Social Security tax (FICA). By reducing his salary, Watson didn't save any income taxes on the $379k in profit distributions he received in 2002 and 2003, but he did save nearly $20,000 in payroll taxes for the two years, the IRS argued, pegging Watson's true pay at $91,044 for each year. Judge Robert W. Pratt agreed that Watson's salary was too low, ruling that the CPA owed the extra tax plus interest and penalties. So why, you ask, don't members of the much-ballyhooed $1 Executive club like Steve Jobs, Larry Ellison, Sergey Brin, Larry Page, and Eric Schmidt get in hot water for their low-ball salaries? After all, how inequitable would it be if billionaires working full-time didn't have to kick in more than 15 cents into the Medicare and Social Security kitty? Sorry kids, the rich are different, and the New Global Elite have much better tax advisors than you!"
Also, yaaahooo, my first first-post!!!
Ah, if someone paid me a dollar for every time I got a first post... I'd be an executive!
No, if you took 95 cents of my dollar every time I got a first post, you'd be an executive.
If you were blocking sigs, you wouldn't have to read this.
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the world needs more atheists...
Politics is Treachery, Religion is Brainwashing
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no, I thought the nation is falling into poverty and the middle class is disappearing, while oligarchs control the government and most of the wealth, and get bailouts from the government when their bad business models fail. Please give me statistics to make me feel wrong about this. Oh, and make me feel good about the "Dutch Sandwich" whereby companies like google only have to pay 2.5% in income tax while enjoying all the benefits of being a U.S company. Give me some extra loving shilling for the system, I've been having thought-crimes lately about it. thanks!