Tech workers pay steep taxes on W-2 wages, but entrepreneurs get breaks the code doesn't offer them. Real estate depreciation can offset your salary. The QSBS exclusion lets you avoid taxes on up to $10 million in gains from startup shares held five years.
I don't think anyone pays more in taxes than highly paid tech employees. Two people in San Francisco making $400,000 a year together. Cool. You're paying half of it in taxes.
If I'm an entrepreneur, what are the biggest things that I need to know about taxes?
The first thing I think everyone should know, even people who are not entrepreneurs, the US tax code is rigged in favor of people involved in real estate. It's the most tax-advantaged asset class. And two, people who start businesses. I know people in San Francisco that have high-paying jobs.
They're marrying somebody and they're like, guess what, honey? You're a real estate broker now. And then they're buying Airbnbs in order to offset W-2 income.
I know with QSBS, I saved a huge sum. Qualified small business stock, which roughly says if you hold shares in a C corporation for 5 years, you pay no taxes on up to $10 million in gains. Maybe the single most generous tax break available today.
