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One word - humidity
Love my Job - BUT VHCOL making it Extremely Tough!!
- Thread starter gaspusher
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why are their compensation tax exempt? i thought if they get stock or options, they still need to pay tax on it when its realized?Haha yes ^
Meka Asonye | First Round Capital
First Round is a seed-stage venture firm focused on building a vibrant community of technology entrepreneurs and companies.firstround.com
Just bought a 6 million dollar home. It’s surprising how many under 40 multi multi millionaires there are around here in tech, VC, PE, etc. If you are purely in it for the money best to become an angel investor rather than studying over and over again for tests in medicine during your 20s.
I get enormous satisfaction from my job, but I’m sure these finance people get enormous satisfaction from their stock options and tax exempt compensation.
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Also i live in nyc which is pretty expensive.
everyone got their own preference. i like the convenient delivery services. tons of restaurant i can just order and have them drop food at my door. grocery shopping as well. i like the convenience.
i dont want to drive to get that stuff, and grocery shop and stuff. yes i get the cost difference financially isnt worth it. i can probably hire a butler in midwest with that money difference hahah
everyone got their own preference. i like the convenient delivery services. tons of restaurant i can just order and have them drop food at my door. grocery shopping as well. i like the convenience.
i dont want to drive to get that stuff, and grocery shop and stuff. yes i get the cost difference financially isnt worth it. i can probably hire a butler in midwest with that money difference hahah
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You know they're big states and you're not considering the central/Eastern sides of the States. Very different weather.
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Those 2 places are 8 hours apart with no traffic…
Not a great example lol
But santa Monica to big bear or wrightwood is 2 to 3 hrs.
Pnw has some beach to snow access. In seattle there are crappy beaches like golden gardens or alki beach and the awesome crystal mountain resort is only 1.5 hrs away from city.
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You are wrong. Going from Bay Area to tahoe is only about 3.5 hours.
Going from Bay Area to santa monica yes, is longer. So maybe santa barbara will be a better choice . Some 4.5 hours. Doable for a weekend trip.
If you include the cold beaches in north, then even half moon bay is there right next to Bay Area
Tahoe does not have a big airport. So that would mean multiple connections to reach there. Irrespective of that, my point was about being able to drive from my home to ski resort in reasonable time
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All of the beaches in California are cold ... once you get into the water.
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This is the honest truth for most of California residents. Truth be told the beach and skiing are “close” at 4+ hours away and possible “for a weekend trip” that rarely happens. Not worth the taxes imho. I can get to both those places (Tahoe and Santa Monica/Santa Barbara) in 4 hours and I don’t live in the same state.
If you can be 4 blocks (or 4 minutes) from the beach, I totally get it and well worth the premium. Not feasible for the vast majority of people.
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Newport Beach and Big Bear are only 2 hours apart from each other. If you live in the vast suburbia in between, it’s really only 30 minutes to the beach and 90 minutes to snow. While I don’t see why anyone would want to go to both on the same day, it can easily be done over one weekend.
Happens very frequently for me. And for a ton of people I personally know.
I have a season pass that allows me unlimited access to many ski resorts in Tahoe. Every year, I ski about 20-25 days spread out over 7-10 different weekends. In each of those 7 to 10 weekends, I just start driving from my home on friday evening and come back home on sunday evening. I don't know which other city in the US will allow me to ski that much - AND - allow me to go to excellent beaches all summer long ; again at a driving distance.
Also, I am not sure how it is possible to be in another state and still be 4 hours driving distance to both tahoe and santa monica. I did look at google maps; and couldn't find any such place.
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OP was saying they could get to those locations "in 4 hours" meaning they can fly in from Vegas, or Phoenix, or Portland, and then drive, and get there in less than 4 hours. Pretty reasonable take
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But is that leave your driveway to destination arrival time? With a lot of waiting at the airport included? Unless you’re flying very small airports, 4 hrs is really hard with air travel even if the flight itself is less than 1 hour.
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Only exception is when it’s a weekend after a major storm. Then big bear can take a lot longer.
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Ok fine, 4.5 hours. I think you're getting beyond the point here
Santa Monica (LAX) may be possible to do under 4 hours end to end (time to go from home to santa monica hotel) if you are flying from las vegas (30 minutes drive to airport, 2 hours pre flight time at airport, 1.5 hour flight time, 30 minutes to uber from LAX to beach).
But Tahoe is certainly not flyable from Las Vegas in under 4 hours end to end (meaning time to go from home to ski resort). Unless you have your own small airplane maybe. And having your own airplane will likely negate any tax savings from not living in california.
In any case, I was referring to the ease of just driving out from home after work on friday and not have to plan air tickets etc in advance.
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Thank you. Yes you are right and I stand corrected.
But as I mentioned above,
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no one cares.
So am I thinking about this correctly then? Say this is the house in questions (note I feel that I am getting a better deal on my current place which a lot nicer, but this suffices haha). Two scenarios.
16300 Azalea Way, Los Gatos, CA 95032 | Zillow
16300 Azalea Way, Los Gatos CA, is a Single Family home that contains 2337 sq ft and was built in 1959.It contains 3 bedrooms and 2.5 bathrooms.This home last sold for $960,000 in April 2002. The Zestimate for this Single Family is $3,446,300, which has increased by $133,660 in the last 30...www.zillow.com
Scenario 1 - Rent the house:
-I rent the house for $6850 a month for 15 years. With utilities I pay $7500. Cost of living adjustment 3% a year. I spend $1,4000,000 to rent this house for 15 years.
-We take that $600,000 down payment and put it in VTI/VOO. Each month, I take the rest of the money I would have been paying the mortgage with ($21,000 - $7500 = $13,500) and just invest that too. In an ideal world I get 8% ROI in the market. That is $6,500,000 after 15 years.
=>So we netted $6,500,000 - $1,400,000 = $5,100,000.
Scenario 2 - Buy the house:
-I take every call shift possible, 1099 side gigs, wife inherits money and somehow we piecemeal our way to buying this house for $3,000,000. We put 20% or $600,000 down and take out a $2,400,000 mortgage at 7.2%.
-After $600,000 down, I am paying $21,000 a month for mortgage, utiliteis, property tax, and insurance. We live extremely uncomfortably paycheck to paycheck.
-If we sell in 15 years with a 5% return on investment each year the house should net $6,200,000.
-We will owe the bank $1,800,000 to pay off the rest of the mortgage and the realtor 5% ($300,000) for selling the house.
=>So we netted $4,100,000 (not including any maintenance, repairs, renovations during that 15 years).
So the difference is $1,000,000 over 15 years (probably closer to $1,500,000 once you factor in repairs/renovations).
There are million and a half confounding factors that can alter each situation: interest rates, natural disaster, market crashes, etc, ect.
HOWEVER, it seems that renting is actually the financially prudent thing to do. Having a home to call your own, of course, has benefits well beyond finances and creates a sense of nurturing that a rental never will. Is it work 7 figures more though?
If you had invested $600k 15 years back and then continued investing $13500 every month since then, you would have about $11 Million today. Here is the calculation if you don't believe me
To be fair, the last 15 years was indeed a big bull market. So the above data I presented is skewed; but it gives an idea.
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I wonder what the farmers’ market in Bangor looks like this time of year?
Central Oregon has entered the chat
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Again, there are many places in the US you can drive to a skiing location Friday night and back Sunday night. That's not special to California. Yes, SD and LA beach communities are quite unique but I'd argue very few people in California (outside the rich and famous) experience those places frequently.
Also, driving from the Bay Area to Tahoe is notoriously horrible. "Trips to Tahoe from the Bay Area can take upward of six, eight or even 10 hours, depending on conditions." I bet I can beat you there taking a plane.
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Even with a direct flight to Reno, you still need to arrive at least 90 min early at the airport, check bags, get through security, wait around, board (boarding alone takes 30min), wait around, maybe de-ice, taxi on runway, fly, land, taxi on runway, wait around, deboard, get to baggage carousel, wait around, find bag, get to rental car counter (possibly wait for shuttle depending on airport), wait around, pick up rental car, wait at rental lot exit, drive to Tahoe. I dislike air travel and just reminded myself why, it involves endless waiting. Unless you are flying out of and in to small regional airports where the waits are usually shorter (and which usually require a connection) nothing is fast or efficient about flying. 4 hrs is a big stretch and all the stars need to align.
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You left out the 40% crash that happened 4 months earlier in 2008 with the stock market.
95% of Americans do not have even more than $1000 disposable cash each month let alone
99% of Americans do not have $10k disposable cash each month to invest.
My brother and his wife make more than 1.2 million a year in California. Which is normal for a two physician family.
But 3 kids. The dogs the house and investment homes. They don’t have 10k disposable cash each month. Plus supporting elderly parents now paying for 2 kids in college. One is ivy league at 60k plus in tuition plus another kid going to same Ivy League (legacy). 3rd kid at uc so cheaper.
Still it’s hard to save $13k a month with 2 kids even with 1 million plus earnings a year
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Realistically, very few people will make a trip to both the mountains and the beach in one weekend even in California. People choose one or the other. However, when I lived in Southern California it was far more feasible and frequent to take weekend trips out to San Diego, Joshua Tree, Vegas, Zion, the Grand Canyon, Palm Springs, Big Bear, Mammoth, Kings Canyon/Sequoia, Channel Islands, Catalina, or one of the local Southern California beaches/beach towns. If I didn't want to go far, I could simply drive to one of the local mountains for a beautiful hike.
Sure if you live in a nearby state you could fly in every weekend, but I don't think that anybody actually does this. It would be exhausting and if you have a family, likely cost-prohibitive.
nobody does it. but we pay for the ability to say we can do it lol
I met up with my California homeboys. One finance guy, two retina guys and one anesthesia guy in Vegas a couple of weeks ago.
They love where they live. (Los Angeles area proper). It’s expensive but they wouldn’t trade it for any other location. All run their own practice even the finance guy. So run everything through the business that curbs some of the California nasty taxes. One owns Lake Tahoe place to ski and he drives all the way up there. He packs 40k miles a year driving. It’s insane.
But they live there because they enjoy it. No price tag you can put on happiness especially when you run your own practice. The eye docs done by 2pm every day. Own multiple location. The anesthesia doc is president of his group and cutting back to 3-4 days a week. Finance guy makes a killing but has time off.
It’s not all doom and gloom in California. People love it there.
They love where they live. (Los Angeles area proper). It’s expensive but they wouldn’t trade it for any other location. All run their own practice even the finance guy. So run everything through the business that curbs some of the California nasty taxes. One owns Lake Tahoe place to ski and he drives all the way up there. He packs 40k miles a year driving. It’s insane.
But they live there because they enjoy it. No price tag you can put on happiness especially when you run your own practice. The eye docs done by 2pm every day. Own multiple location. The anesthesia doc is president of his group and cutting back to 3-4 days a week. Finance guy makes a killing but has time off.
It’s not all doom and gloom in California. People love it there.
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Maybe you should talk to this buddy's jr partner or partner track attending about how happy they are to live in California making 350k to get a different perspective
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translated: cheating on your taxes.
Nah. I don’t why you are so hard up on these things. Dentists are 100x worst than doctors at
Tax write offs. Most claim net income of less than 80k. You really think the hospital or surgery center or office base anesthesia you work has clean accounting? They are far worst.
40% of Americans pay zero federal taxes. Are they cheating?
The top 1% contribute 40% of yearly tax revenue. The top 5% contribute 80% of all tax revenue.
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Uncle Sam needs us to pay a lot so they can continue the responsible spending with those dollars.
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Sounds like you have a solid defense planned out 😉
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Yet again, the only defense you offer for your flagrant tax fraud is the odd claim that other people commit more fraud than you do and that some corporations and rich people pay lower taxes than you do.
Uncle Sam is worst than regular business with their fraud.
Ive been audited. Passed with flying colors. I know what I’m doing.
I’ve defended myself. Case shut. People are either not smart or jealous or both.
People buy 6000 suv all the time. Deduct trips all the time. These are all LEGAL expenses. There are business selling online cme literally advertising them as travel cme. Solo 401k are legal. I file 5500 ez forms.
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For **** sake man, just today in the Roth thread you claimed $50K "CME" vacations were legit, and that you could deduct Disney tickets for the family.
It's tax fraud. Odds are you'll never get audited, but god help you if you do.
No. I said an average Disney ticket and hotel and food cost a family 10k at min for a vacation.
Business class airplane seats cost $3000-5000. Hotel for skiing is $1400 a night this spring. So a 7 day ski trip is easily 15k just for myself.
I don’t deduct kids airplane tickets
I know the rules.
So explain to me what part of tax fraud I’m doing? Again. I think a lot of stuff against me is just purely either people are not knowledgeable about the rules or just jealous.
So my drug rep friend is in Vegas now for a work “retreat”. Like right now. Is that an illegal tax deduction by a big pharmaceutical company?? All expenses paid. They are literally posting on Facebook what they are doing.
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My CPA says S corp takes half their salary as W-2 and the other half as K-1 dividends. It’s audit proof. Also, lots of deductions as permitted by law.
Lawyers are the worst offenders taking less than 1/4 as salary and the rest as dividends. Also, their deductions exceed aneftp by a mile.
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I don’t think your accountant is correct. The distributions aren’t dividends. “As a shareholder of an S Corporation, your income is a form of non-dividend distributions, so its not subject to capital gains tax. For tax purposes, distributions are part of your ordinary income.”
If your S corp is paid X dollars for Y work you do on its behalf, 0.5X dollars shouldn’t be considered a reasonable salary since it is obviously half of what a reasonable salary would be without the S Corp tax avoidance scheme. The fact that this scam continues to exist just shows how corrupt the government is, setting up tax loopholes for their donors.
Our tax system is complicated.
If the govt really wanted to cut down on fraud. They should tax healthcare benefits employees get.
Some health benefits are worth in excess of 30k a year. That would freak out the general public. Image having gold plated healthcare with no deductible like many employees of state institutions have. Or even Netflix and other silicone valley companies.
Paying an extra 10k in taxes for healthcare would turn a presidential election easily if one president was opposed to that.
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All of you getting paid to an S corp with 100% of its income coming from your work are likely committing tax fraud for any amount paid as a distribution. Sure, pay for your cme, computer, spouse salary if they actually work to arrange your locums gigs (which they probably don’t), and stuff like that, but the rest should be taken as income and subject to payroll taxes.
It’s obviously fraud, but the IRS has been allowing it forever. Hopefully they’ll stop that some point.
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What Is an S Corp “Reasonable Salary”? How to Pay Yourself — Collective
Learn what is an S Corp “Reasonable Salary”, get S Corp salary examples and know the tax benefits of running an S Corp. Calculate a reasonable salary for yourself.
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My link is IRS.gov. What’s yours?What Is an S Corp “Reasonable Salary”? How to Pay Yourself — Collective
Learn what is an S Corp “Reasonable Salary”, get S Corp salary examples and know the tax benefits of running an S Corp. Calculate a reasonable salary for yourself.www.collective.com
“But to the extent gross receipts are generated by the shareholder's personal services, then payments to the shareholder-employee should be classified as wages that are subject to employment taxes.”
S Corporation Compensation and Medical Insurance Issues | Internal Revenue Service
When computing compensation for employees and shareholders, S corporations may run into a variety of issues. This information may help to clarify some of these concerns.
You really are just saving on Medicare taxes with a corp
John Edwards the former senator got really bashed in the news in 2004 for his s corp and paying himself 10% salary (500k of his true business profits (5 million) so he saved himself 290k in Medicare taxes alone when he ran for vice president with another tax cheat (John Kerry I want to dock my yatch in another state to avoid taxes)
So should John Edwards have paid himself 2.5 million?
That’s what blade meant by saying lawyers are far worst at the s corp tax schemes.
