May 20 2008
May 20 2008
This is a no-brainer that can be hard to do. Family, friends, schools, pets all figure into the situation. But is should be on your plate.
Here are some of the top rates for state income taxes; Vermont 9.5%, Oregon 9% and New Jersey 8.97%.
Now there are many other states with high state income taxes. The California State Motto is Eureka "I have found it!" is aptly stated. After all California has a 9.3% state income tax rate plus a 1% kicker imposed on taxable income over $1 million. If I read the tax codes right that equals 10.3%.
Since it makes my case, let’s look at the worst case. You net $500k from your hosting business. In California you pay about $45k in state income taxes and another $155k in Federal Income Tax. So 40% goes to the government. Not to mention FICA, 8.5% sales tax etc.
So you decide to sell the business, it sells for $5 million. In California that adds about $500,000 of your money to the state coffers. You get $500k less. Your retirement fund just dropped $500k. That Ivy League school for the kids is a bit tougher to handle.
Do some family planning. Move to Florida, it has zero, nada, and no state income tax. So does Alaska, Nevada, South Dakota, Texas, Washington and Wyoming.
Now the M&A Part – Buyers don’t make up for the sellers shortfall. It is just as easy to buy a company in Texas as in California. Think this one over for a while.
So talk to your attorney and accountant, make sure everything’s legal and makes sense. Then come on down to Florida a couple years before you sell. You could add some $600k to the retirement fund. Oh yes, real estate is a bargain since the bubble burst.
Written from Cape Coral, Florida - Rather than our old Milwaukee diggs (6.75%)
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May 20 2008
Parallels' third annual hosting summit kicked off Monday with a record turnout and a warm welcome from Doug Johnson, Parallels' director of marketing - service provider division.
He went over the various aspects of the summit attendees could take advantage of over the next two days, which consist of several sessions broken into three tracks: Business, Technical and Industry, as well as what has turned out to be quite a bustling exhibit hall, a schmooze-friendly networking lounge (which is sponsored by theWHIR, by the way, so come by and say hello to the friendly WHIR ladies!) and a hands-on lab where attendees can demo the various Parallels solutions.
The summit has been an eventful one so far, for me at least. I have had quite a few interesting conversations with some of the attendees (which have arrived from around 20 countries) and interviewed a couple of companies that are doing some uber cool things in this space, so look forward to our WHIRtv interviews with SolarVPS and SoftLayer in the next few weeks.
The general feeling seems to be one of contentment. Attendees are pleased with the presentations they're sitting in on and many have said there is definite value in being at this event. Although it was closer to the end of the day, Dan Golding's presentation was relatively well-attended as people eagerly tuned in for Tier 1's insight into the managed hosting space.
In his presentation titled "Cloud Computing, Virtualization and On-Demand Services: Trends in the Managed Hosting Space" Golding discussed the various developments in Hypervisor and OS Virtualization and how each has been evolving. He stressed on the much-repeated mantra that virtualization was a MUST for hosting providers and the idea that OS virtualization was more of a "transitional" stage to be in. "The future will belong to hypervisors," says Golding.
He believes it is very probable, in the next three to five years, to see every server with a hypervisor. And considering the industry's particular interest in "green" technologies, hypervisor virtualization seems to be a great way of reducing some of that energy expenditure. Hypervisor apparently collapses server sprawl by about 20 to 1 and energy savings by about 20 to 3.
On the topic of cloud computing, Golding says it is definitely the area that managed hosts will be transitioning into with on-demand storage being the way to go. Golding was very enthusiastic about this and eagerly encouraged everyone in the audience to get the ball rolling on an on-demand storage offering, even if was only as a "protective" measure to keep their customers from turning to Amazon's extremely popular S3 solution. "This is the time for on-demand storage" says Golding.
One other brief, but interesting point that has been mentioned at the summit is that Parallels will more than likely be holding another event in January (no real details about it yet) but it is highly encouraged that all attendees fill out the feedback form so they can have a say with where it occurs and how it turns out.
And now it's off to Day 2 of the Summit!