CFO heads should roll over this. It's their job to be up to speed on tax changes and plan for eventualities like this.
We aren't making huge profits to absorb the costs and give me a fat bonus to cover my taxes. In fact in 2022, I WAS expecting a nice $30k loss and a refund. Do we deserve to survive? Probably not in some peoples' minds, but we've been scrapping together a living so far. It sucks because we were actually growing and gaining some momentum: any further growth would now be pretty impossible because I can't afford to pay my personal taxes to cover additional dev salaries.
I am a single-man business. Would your situation be better if it had just been you? In other words, was it the fact that you had that other employee that is going to cause you to shut down? Or would it have happened with just you?
So, two scenarios: a) If you were a sole-proprietorship, you made $100K revenue, paid $10k in AWS fees, you would pay personal taxes on $98k (100 - 10/5) that year. b) If you paid a contractor $50k that year, you would pay taxes on $88k. (100 - 10/5 - 50/5).
In the past taxes base would be a) $90k (100 - 10) and b) $40k (100 - 10 - 50). So yeah larger tax implications for having employees, but the same would be the case with any expense.
It looks like I may have to shut down my business before I even get started.
Good luck with your situation!
I appreciate your point about not putting faith in Congress, but as a country we should not let them off the hook for passing batshit insane legislation that screws over small businesses.
Congress doesn't need to be involved to screw over small businesses.
If the last few years have demonstrated anything, it's the government can freely destroy small businesses by forcibly shutting them down for completely intangible reasons without the slightest repercussion.
https://www.wsj.com/articles/u-s-cfos-ask-congress-to-repeal...
Small companies don’t have CFOs.