Wrong.I believe anything under 500 employees counts as a small business regardless of revenue.
Well then you have the problem of companies simply never growing beyond that size. Instead they found another company that is a wholy owned subsidiary but is a different companyThat definition has to change. Maybe we need several different degrees of what it means. A small business category could be broken into:
1. Single owner, no employees.
2. Less than 100 employees.
3. 100 to 1000 employees.
define them by the number of employees solely?
Try again. The IRS has had Sub-Chapter S rules for ever and ever.http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-CorporationsObama hasnt decided yet what constitutes a small business.
His BUSINESS would have to earn $250k PROFIT to be affected by this. IF his Cost Of Goods Sold for example, included buying some trucks and paying drivers to drive them he would then have to earn ALL the cost of those Trucks - including amortization - AND the wages PLUS $250k MORE to be affected. Note that the appreciation of his business based on cashflow value (typically 3x the cashflow) IS NOT TAXED at least until he sells out. So if he for example plows everything back into his business and instead BORROWS money based ont he business valuation, he owes ZERO taxesI have a question. A rightwingnut guy I know is decrying the $250K thing.
He runs a demolition business and employs contractors (I don't think he has any permanent employee other than himself).
Wouldn't he have to earn at least $250K PERSONALLY? Then pay the extra tax on anything OVER $250K?
First, I know he doesn't earn $250K per year, but even if he did earn, say $300K, he'd pay more tax on the extra $50K, right?
I admit to being confused about how this works.