Re: EOL

On Tue, Apr 29, 2003 at 01:09:31PM -0400, Jason Dixon wrote:
>
> Ok, I volunteer. I will soon be reselling "corporate versions" of

(sorry for the earlier partial message)  

If you want to do this, you'll need to set up a nonprofit org to do it; otherwise, you're going to end up paying taxes on the money you send to Theo and the project.

Let's say you do this as an individual, and you don't take any cash out for yourself, other than to reimburse direct expenses - for every CD sold, you're going to have around $450 in self-employment income that'll get taxed at somewhere between 30-50% depending on your other income, plus whatever your local city & state want.

If Theo and the project were a charitable or religious organization - which they're not - then the amounts sent to them would be deductible on your Schedule A, assuming that you itemize deductions. That would eliminate the income tax burden, but not the self-employment tax burden, so you'd only have to pay 15% of the income to the feds.

Or, you think that sounds like a very inefficient way to give money to the project, so you form a corporation to do this stuff instead .. whoops, corporations can't deduct more than 10% of their income as charitable deductions.

The US' tax system does allow for people who act as conduits & collectors of money for non-profit purposes, but there's a significant paperwork & oversight system set up to make sure that for-profit businesses don't take unfair advantage of the system.

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Further, it's not even clear that Theo & the other developers would consider that sort of thing helpful.

So .. perhaps not a good choice.

--
Greg Broiles
gbroiles@parrhesia.com