Kamala's $50k tax credit for Startups is a joke - most don't even make a profit for the first several years

[Bigdog]

Why do white libs know so little about business and job creation.

If you are not making a profit, a tax deduction is useless.


" According to the U.S. Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more. These statistics haven't changed much over time, and have been fairly consistent since the 1990s."

Top 6 Reasons New Businesses Fail

Running your own business may be the American Dream, but it can be difficult for many entrepreneurs. Learn how to avoid common factors leading to bankruptcy.

www.investopedia.com

 

[Geeko Sportivo]

Why do white libs know so little about business and job creation.

If you are not making a profit, a tax deduction is useless.


" According to the U.S. Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more. These statistics haven't changed much over time, and have been fairly consistent since the 1990s."

https://www.investopedia.com/financ... the U.S. Bureau,during the first 10 years.[/

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Kamala's $50k tax credit for Startups is a joke - most don't even make a profit for the first several years​

​

Hence the need for a 50K break on their taxes!

I can see that.

 

[Bigdog]

Kamala's $50k tax credit for Startups is a joke - most don't even make a profit for the first several years​

Hence the need for a 50K break on their taxes!

I can see that.

You don't need a tax deduction if you aren't making a profit. Which is the typical scenario for the first several years. It's not going to save your business from going bankrupt.

She has provided no details on how it would work.

 

[Walt]

Currently, you are allowed to take $5k of the startup cost(business costs before you even open for business) in the first year of business. The rest has to be amortized over the following 15 years. That means that you can quickly owe taxes, before you even made a profit.

Harris' plan is to allow $50k in the first year, and the rest amortized over 15 years.

One a business deduction is made, it can go forward forever. So it will reduce taxes for as long as it takes to use it up. The more the IRS forces you to amortize, the better the chances that you will go bankrupt before getting the deduction.

Amortizing makes a lot of sense for already profitable, established businesses, because it reduces the taxes over time.

 

[Walt]

You don't need a tax deduction if you aren't making a profit. Which is the typical scenario for the first several years. It's not going to save your business from going bankrupt.

You will use the business expense to reduce profits, whenever you make the profits. Having to pay taxes on "profits" that do not exist is very painful for a new business.

 

[Cypress]

Currently, you are allowed to take $5k of the startup cost(business costs before you even open for business) in the first year of business. The rest has to be amortized over the following 15 years. That means that you can quickly owe taxes, before you even made a profit.

Harris' plan is to allow $50k in the first year, and the rest amortized over 15 years.

One a business deduction is made, it can go forward forever. So it will reduce taxes for as long as it takes to use it up. The more the IRS forces you to amortize, the better the chances that you will go bankrupt before getting the deduction.

Amortizing makes a lot of sense for already profitable, established businesses, because it reduces the taxes over time.

This is why I try to avoid blabbing about topics I don't know much about. Tax law being one.

The thread author obviously doesn't know anything about taxes, but just saw something on Gatewaypundit and dashed back here to post about it

 

[Walt]

This is why I try to avoid blabbing about topics I don't know much about. Tax law being one.

The thread author obviously doesn't know anything about taxes, but just saw something on Gateway pundit and dashed back here to post about it

Tax law is interesting, in that you are sure that you know nothing about it, and pickup more and more information about it, and suddenly realize you actually know a few things about it. That being said, you are right to be careful. It is easy to make really bad mistakes that begin to look like crimes.

There is some amazingly bad advice going around on the internet. You hope no one is listening to it, but it appears some are.

 

[Poor Richard Saunders]

Why do white libs know so little about business and job creation.

If you are not making a profit, a tax deduction is useless.


" According to the U.S. Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more. These statistics haven't changed much over time, and have been fairly consistent since the 1990s."

Top 6 Reasons New Businesses Fail

Running your own business may be the American Dream, but it can be difficult for many entrepreneurs. Learn how to avoid common factors leading to bankruptcy.

www.investopedia.com

Thanks for showing us you know nothing about businesses, how their profits are calculated, and the taxes they pay.

 

[Walt]

You don't need a tax deduction if you aren't making a profit.

Profit is revenue minus business expenses, so you do need business expenses to avoid paying taxes on profits. This allows you to claim more business expenses quickly so it reduces your profit. This gives you more time to build a business before the taxes are due.

 

[Walt]

She has provided no details on how it would work.

She has provided all the details for how this works. Rather than only being able to take $5k of the startup business expenses immediately, you can take $50k. The rest is amortized over 15 years both under her plan and now.

If you did not know the details, why were you assuming how it works?

 

[Trumpet]

Why do white libs know so little about business and job creation.

If you are not making a profit, a tax deduction is useless.


" According to the U.S. Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more. These statistics haven't changed much over time, and have been fairly consistent since the 1990s."

Top 6 Reasons New Businesses Fail

Running your own business may be the American Dream, but it can be difficult for many entrepreneurs. Learn how to avoid common factors leading to bankruptcy.

www.investopedia.com

Big Poop, are you telling us that businesses didn't fail when Trump was president???? It also should be remembered that Trump when bankrupt 6 times.

 

[Bigdog]

You will use the business expense to reduce profits, whenever you make the profits. Having to pay taxes on "profits" that do not exist is very painful for a new business.

Except most new businesses will fail before they can complete their full amortization schedule.

And most new businesses pump all their profits right back into the business. Her plan will do nothing to stop new startups from failing, and they won't use the deduction for years and years.

So, yes it's a joke. It's not even a stimulus.

Passing a law that the gov't Covid shut down will never happen to businesses again, ... now that would be something!!!!

 

[Bigdog]

Profit is revenue minus business expenses, so you do need business expenses to avoid paying taxes on profits. This allows you to claim more business expenses quickly so it reduces your profit. This gives you more time to build a business before the taxes are due.

You talk about profits, ... when many beginning owners can't eve afford to pay themselves the first year.

 

[Bigdog]

She has provided all the details for how this works. Rather than only being able to take $5k of the startup business expenses immediately, you can take $50k. The rest is amortized over 15 years both under her plan and now.

If you did not know the details, why were you assuming how it works?

Let me repeat, ... typically, a startup does not need the deductions during the early years. Which is all she is offering. It is a joke.

 

[Bigdog]

Big Poop, are you telling us that businesses didn't fail when Trump was president???? It also should be remembered that Trump when bankrupt 6 times.

Yeah, out of 500 businesses, that's an excellent track record.

I posted the Stats. Clearly, you were unable to understand them.

 

[Walt]

Except most new businesses will fail before they can complete their full amortization schedule.

Which makes Harris' plan to allow the businesses to take more of the business deduction at the beginning so good. With Harris, they can take $50k worth of business deduction on day one, unlike the current plan where it is only $5k.

And most new businesses pump all their profits right back into the business.

Exactly, so with Harris plan, they can pump 100% of the first $50k of profits back into the business, rather than having to pay taxes on some of it before pumping it back into the business. It may sound like a little thing, but it actually can be quite big.

Her plan will do nothing to stop new startups from failing, and they won't use the deduction for years and years.

Most will use it to offset immediate profits.

Passing a law that the gov't Covid shut down will never happen to businesses again, ... now that would be something!!!!

You want us to pass a law that emergencies will never happen again? I can guarantee you that emergencies will happen again. There will be hurricanes, floods, and even possibly wars and plagues. Passing a law saying that they won't happen is meaningless.

 

[Walt]

You talk about profits, ... when many beginning owners can't eve afford to pay themselves the first year.

It is not uncommon for S Corp owners to have to pay taxes on the profits their pass through corporation made, even though their corporation was unable to pay them any profits. This will help them with that, by reducing the taxable profits.

 

[Walt]

Let me repeat, ... typically, a startup does not need the deductions during the early years. Which is all she is offering. It is a joke.

If a corporation is making revenue, it needs business deductions, or all that revenue is taxed as profits.

If they have too much business deductions, they can roll that over forever, removing revenue from taxable profits, until it is all used.

Any business should be very concerned with finding as many business deductions as they can given their business plan. It is the difference between survival and collapse.

 

[Walt]

Yeah, out of 500 businesses, that's an excellent track record.

I posted the Stats. Clearly, you were unable to understand them.

trump has had more in debt forgiveness than his net worth. That means his complete net worth is stolen from lenders and investors.

 

[Bigdog]

Which makes Harris' plan to allow the businesses to take more of the business deduction at the beginning so good. With Harris, they can take $50k worth of business deduction on day one, unlike the current plan where it is only $5k.

Exactly, so with Harris plan, they can pump 100% of the first $50k of profits back into the business, rather than having to pay taxes on some of it before pumping it back into the business. It may sound like a little thing, but it actually can be quite big.

Most will use it to offset immediate profits.

You want us to pass a law that emergencies will never happen again? I can guarantee you that emergencies will happen again. There will be hurricanes, floods, and even possibly wars and plagues. Passing a law saying that they won't happen is meaningless.

They amortize so they can spread the deductions out. I repeat, ... they do NOT need the dedutions the first several years.

When you reinvest profits before the end of the tax year, they are no longer profits ... they are expenses.

I repeat, ... startups rarely profit the first several years. And when they do, those profits are immediately reinvested as expenses.

Gov't never ordered all small businesses to close, and denied small landlords their rent before. So don't try to deflect with "emergencies".