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A comment on DigitalOcean Raises $37.2M From Andreessen Horowitz to Take on AWS. Parent comment

Re:DigitalOcean Raises $37.2M From Andreessen Horowitz to Ta... by logjammer on Thursday March 06, 2014 @01:15PM (#7355516)
No, that is not how it works. Your salary is an expense for the company, paid before any corporate tax is paid, and thus reduces corporate tax.

A company that has $10MM in revenue, and $10MM in salary expense will pay zero corporate income tax.

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Re:DigitalOcean Raises $37.2M From Andreessen Horowitz to Ta... by gamblor956 on Thursday March 06, 2014 @02:08PM (#7355860)
A company paying its owner $10mm in salary cannot deduct all $10 million. It could probably get away with paying a six-figure salary (fully deductible), but the rest would be re-characterized as a dividend and the underlying "salary" expense would not be deductible. At the numbers we're talking about in this hypothetical, the corporation would be treated as severely underreporting its tax liability--meaning the highest penalty rates, back interest, and possibly including jail time.
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Re:DigitalOcean Raises $37.2M From Andreessen Horowitz to Ta... by res0nat0r on Thursday March 06, 2014 @02:44PM (#7356093)
His point is: salaries are an expense.
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