FranLab is getting evicted

[nctnico]

In Fran's current business situation, her spending exceeds her income right now. No profits to tax, so no big tax bills.

She has mentioned that tax is a sizeable problem. I think they tax the money coming from Patreon and google before she gets it or something.
How it works here is if my busines expenses (including wages) matches my business income then my business pays zero tax.
I get taxed as a wage earner though.

I'm quite sure income taxes as a business owner versus the type of business (sole proprietor, share holder of an LLC, etc) varies a lot per country. What is universally the same is that it is very wise to talk to a financial / legal expert to check whether the type of business fits your needs & wishes. Yes, that is going to cost some money but I think it is well worth it.

[Nominal Animal]

it is very wise to talk to a financial / legal expert to check whether the type of business fits your needs & wishes. Yes, that is going to cost some money but I think it is well worth it.

Fully agreed, and also applies to all sorts of questions one might have wrt. for example licensing, patents, et cetera.  Just book an expert for an hour, explaining your stance (I like to start with "I'm not trying to minimize my costs by skirting the law; I want to be firmly on the legal side, and understand my options") and your questions beforehand, and listen and make notes.

One trick to finding a good one to ask questions from, is to ask an expert who they'd ask.  Some of them will use heavy legalese and won't be interested in explaining things to laymen, but some of them like teaching and are passionate experts, and are happy to explain and answer such questions.

It is definitely worth the cost in my opinion and experience.

[SiliconWizard]

Again I don't know about the US laws  for employers exactly, but over here and others parts of the world, employers have to pay taxes on employees. The net wage gotten by the employee is only a fraction of what the employers pays for them in the end.

A fraction? That can't be right.
Here it's 5.1% "payroll tax" but only if you have over $1.2M in wages.
https://www.payrolltax.gov.au/resources#resources__rates_and_thresholds

There are other small costs but it's basically no big deal.

That is good to know. I can assure you that over here it's twice the net wage. It's horrific. I guess it can be significant in the US too if you include all the additional benefits, but probably employee benefits are not *mandatory* for an employer, so at its discretion? Over here, we don't have a choice, whatever the size of the company and its revenue. It's about 50% in the employee's pocket and 50% in taxes. Of course that includes all social protection which works very differently in the US. But if we want an employee status over here, we just don't have a choice. And that's before income tax of course which employees pay depending on their net income.

[EEVblog]

I'm quite sure income taxes as a business owner versus the type of business (sole proprietor, share holder of an LLC, etc) varies a lot per country. What is universally the same is that it is very wise to talk to a financial / legal expert to check whether the type of business fits your needs & wishes. Yes, that is going to cost some money but I think it is well worth it.

In the US I beleive it's hugely state based, not national. Loius Rossmann for example just moved from New York to Texas (partly) because of the state based red tape and taxes.

[Nominal Animal]

The last time I paid wages was almost two decades ago now, but at the time, in Finland, the employer costs were about 38% to 40% on top of the employee salary.  However, if the company was profitable without debt, then to be able to pay that salary, the company had to make enough income to cover VAT for all that.  At the time, it rose from 22% to 24% IIRC. So, to be able to pay x in wages, one had to charge at minimum 1.5x for that work, and that excludes all overhead of running the company.

For larger companies, the employer costs were even higher, but they offset the costs by incorporating in e.g. Ireland, and paying concern debt and fees, so that the subsidiary in Finland was all the time in the negative profit.

Funnily enough, the most profitable business model here is to buy cheap and sell high, without changing anything.  You only have to pay VAT for the difference, and at least here, companies typically pay much more than private customers for the exact same product or service: poor quality is not an issue, if you change your trade name every two to three years.  In the IT sector here, therefore, the most profitable model was to have your tender writers and salesmen in Finland, but all production in a cheaper country, with a parent corporation in Ireland or similar, to which the Finnish subsidiary is in debt and paying concern fees.

No wonder the country is becoming a banana republic, when producing anything useful is taxed way heavier than just buying and selling imported crap.  Basically, the Finnish system punishes for selling work, and rewards trading imported crap. 

[Quarlo Klobrigney]

In the US, there are some states that charge state income tax and others do not.
Then there is FICA aka social security withheld for all employees.
Next there is federal tax which is withheld  for employees.

It all gets sorted out on the federal and state tax forms every year.
No withholding or under withholding you will draw scrutiny of the IRS's eyes.

I'm sure there is a paper trail of all the income by YouTube, eBay, Patreon etc.
Risky business not declaring.  Look at Al Capone.

[SiliconWizard]

No wonder the country is becoming a banana republic, when producing anything useful is taxed way heavier than just buying and selling imported crap.  Basically, the Finnish system punishes for selling work, and rewards trading imported crap. 

It's pretty much the same in many parts of Europe.

[james_s]

In the US I beleive it's hugely state based, not national. Loius Rossmann for example just moved from New York to Texas (partly) because of the state based red tape and taxes.

It is both. There are federal taxes and state taxes, everyone pays the federal taxes then the state taxes are on top of both. You'd definitely want to talk to somebody knowledgeable about the specific state you were planning to start a business in.

[sokoloff]

She has mentioned that tax is a sizeable problem. I think they tax the money coming from Patreon and google before she gets it or something.

That sounds like they're withholding from her checks, which is not the same as that income actually being taxed. The withholdings are just a crude estimate of what tax will end up being due on it; the final tax calculations are done according to the tax code when you file your return and the previously withheld amounts are taken as credits against that. Over-withholding leads to a tax refund (financially inefficient though people seem to broadly love loaning the government money without interest all year long and then get happy when they get their own money back); under-withholding means you end up writing a check at tax time (ideal, as otherwise, you loaned the government money all year long for no interest).

Patreon says they don't even withhold taxes: https://support.patreon.com/hc/en-us/articles/207477063-US-Creator-Frequently-Asked-Tax-Questions

Google says they don't withhold taxes iff you've registered your tax information with them. (That sounds backwards, but is correct.): https://support.google.com/youtube/answer/10391362?hl=en

[tom66]

That sounds like they're withholding from her checks, which is not the same as that income actually being taxed. The withholdings are just a crude estimate of what tax will end up being due on it; the final tax calculations are done according to the tax code when you file your return and the previously withheld amounts are taken as credits against that. Over-withholding leads to a tax refund (financially inefficient though people seem to broadly love loaning the government money without interest all year long and then get happy when they get their own money back); under-withholding means you end up writing a check at tax time (ideal, as otherwise, you loaned the government money all year long for no interest).

In the UK, no interest is paid on overpaid taxes even if due to an error in HMRC's part.  If, however, you make an error on your tax return and correct it after the deadline, you pay 8% + base rate on the error.  Ah, isn't taxation fun?

(N.B. in certain cases HMRC will pay corporations interest if an error is on their end, but in general this does not apply to small traders.)

[Quarlo Klobrigney]

Tax refunds are for the gullible. Yes! Loan the government your money!
Now at 0% interest now for 1 year!

[james_s]

Tax refunds are for the gullible. Yes! Loan the government your money!
Now at 0% interest now for 1 year!

I'd still rather get a modest refund than have an unexpected tax bill. These days I usually end up owing money. I liked it better when I got a few hundred dollars refunded. My cost to loan the government a small sum is outweighed by the convenience of not having to send them a payment.

[Quarlo Klobrigney]

That's what banks are for. I'd rather have my money working for me than at the IRS at 0%.
For those more inclined, the mere pittance that the bank interest pays, there are other alternatives.

[EEVblog]

In the US I beleive it's hugely state based, not national. Loius Rossmann for example just moved from New York to Texas (partly) because of the state based red tape and taxes.

It is both. There are federal taxes and state taxes, everyone pays the federal taxes then the state taxes are on top of both. You'd definitely want to talk to somebody knowledgeable about the specific state you were planning to start a business in.

Yes, state is on top of federal, but it's the state based taxes that I hear all the yanks complaining about.
We don't have state based income taxes here. There are some difference in states in regards to payroll tax I I mentioned, and taxes if you are big building developer or something, but not something the individual needs to worry about.
No one ever moved stats in Australia because of taxes.

[Quarlo Klobrigney]

Many "free" (non corrupt) states have no state income tax. The difference is made up in sales tax which is below 8%.

[james_s]

Yes, state is on top of federal, but it's the state based taxes that I hear all the yanks complaining about.
We don't have state based income taxes here. There are some difference in states in regards to payroll tax I I mentioned, and taxes if you are big building developer or something, but not something the individual needs to worry about.
No one ever moved stats in Australia because of taxes.

The state taxes tend to be more visible, largely because there is something to compare them to. For example the state adjacent to mine, Oregon, has no sales tax which makes our state sales tax annoying. On the other hand, Oregon has much higher property taxes so moving there to get away from the sales tax is jumping out of the frying pan and into the fire. Some states are substantially more friendly to businesses, so it's no surprise to see large companies relocating to those states. The federal taxes apply to everyone so there's no escaping them, and the main one is on income. For most people that money is taken out of their paycheck before they ever see it.

[EEVblog]

Fran is trying to kickstart her old Frantone channel. That will unfortunately be a long hard slog. I'd be sticking with FranLab in the current situation, but as someone with 3 channels, I can see the appeal of doing that.
Maybe a step in getting Frantone back into manufacturing?

[james_s]

That's what banks are for. I'd rather have my money working for me than at the IRS at 0%.
For those more inclined, the mere pittance that the bank interest pays, there are other alternatives.

Do what works for you. The amount I'd earn off having a few hundred bucks in a bank or some other investment is offset just by the time and hassle required to send a payment to the IRS. It's not even worth messing with, my time is worth more than that.

[EEVblog]

Looks like the gamble on pleasing the Patrons didn't pay off by doing one video a week.
She lost 90% of the Youtube views for not uploading frequently, and that also lead to not having enough Patrons to replace those that drop off. Brutal! 
So she is back to one video per day hampster wheel.
She will have another video coming soon, but here is a mention of it:
It's amazin how some channels can make one video a week/month and not only do fine, but grow. But then other channels can't. We are a slave to the algorithm.

https://youtu.be/mjuEdw016L0?t=5926

[sokoloff]

That outcome is unfortunate, but is also one of the least surprising things I've read in this entire thread. This exact outcome  was prophesied two months ago.

[EEVblog]

That outcome is unfortunate, but is also one of the least surprising things I've read in this entire thread. This exact outcome  was prophesied two months ago.

Yes, although you never know how the algorithm is going to punish or reward your channel. Always worth testing, the views could have stayed or even improved. It really does depend on how Youtube decides to push your videos. And the algorithm is always changing. But a 90%+ drop is astonishing, no way I expected that.
Personally I don't really look at the stats any more, as my income isn't entirely dependent upon daily/monthly views.

[rsjsouza]

Depending on a third party with such flaky terms and conditions and no warranties expressed cannot be seen as a viable living. The past two months were rough to generate content in a steady way and the audience simply vanished. Impressions, views, subscribers, etc suffered 60, 70% loss. Youtube is a store display for your company, not the main revenue (unless for a few that amassed huge followings).

Although Fran had businesses in the past, she seems to keep the emotions get in the way of profitability. We all have these emotions, but they cannot be a threat to viability of a business or livelihood.

Until she gets a grip on this, Fran lab, tone, etc. are unfortunately doomed to fail or ve eternally on life support.

Oh well... All that was said time and again... Good luck to her.

[james_s]

Looks like the gamble on pleasing the Patrons didn't pay off by doing one video a week.
She lost 90% of the Youtube views for not uploading frequently, and that also lead to not having enough Patrons to replace those that drop off. Brutal! 
So she is back to one video per day hampster wheel.
She will have another video coming soon, but here is a mention of it:
It's amazin how some channels can make one video a week/month and not only do fine, but grow. But then other channels can't. We are a slave to the algorithm.

https://youtu.be/mjuEdw016L0?t=5926

One video per *day*? Who on earth has time to watch that many, and how high can the quality possibly be? I would much rather watch one really well produced video per month that crappy daily filler. Quality over quantity.

[EEVblog]

It's amazin how some channels can make one video a week/month and not only do fine, but grow. But then other channels can't. We are a slave to the algorithm.

One video per *day*? Who on earth has time to watch that many, and how high can the quality possibly be? I would much rather watch one really well produced video per month that crappy daily filler. Quality over quantity.

The thing is that doesn't work for a channel like Fran's which (like mine) is an eclectic channel, with many different types and styles of video content.
That means that one video per week less means that it is guaranteed that fewer subscribers are going to get the video they are interested in and hence watch. Because everyone subscribes for a different reason.
This is why the subscriber to view ratio of a channel like mine or Fran's os WAY lower than channel like for example, Big Clive, Great Scott, or Electroboom.
Those channels produce basically one style and type of very consistent content that appeals to the majority of people who subscribed.
If you don't have that consistency then you have to produce more content to hopefully gian the clikcs of the subscriber base.

And this is just to keep your existing subscriber base engaged, it doesn't include attracting new audiences and pleasing the algorithm.

And small thing video length make a big difference. My latest video I will release tomorrow I aggresively edited to just under 20min so it appears to people as a "10 something minute video" instead of a "20 something minute video" so it will hopefully get more clicks from existing subscribers when they get notified.

[nctnico]

Looks like the gamble on pleasing the Patrons didn't pay off by doing one video a week.
She lost 90% of the Youtube views for not uploading frequently, and that also lead to not having enough Patrons to replace those that drop off. Brutal! 
So she is back to one video per day hampster wheel.
She will have another video coming soon, but here is a mention of it:
It's amazin how some channels can make one video a week/month and not only do fine, but grow. But then other channels can't. We are a slave to the algorithm.

https://youtu.be/mjuEdw016L0?t=5926

One video per *day*? Who on earth has time to watch that many, and how high can the quality possibly be? I would much rather watch one really well produced video per month that crappy daily filler. Quality over quantity.

I disagree. Several Youtubers release a video per day to give an update on the projects they are working on. Typically these videos range from 5 minutes (done nothing) to over an hour (took something complex apart). But these Youtubers have & need to have at least one full-time employee who films and edits the videos. And yes, these videos are worth watching if you are interested in the subject matter.