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Building and Growing Your
Game Business
Quoc Tran
CTO
Possum
www.possumbooks.com
I made too much money
• Closed previous startup because we made too much money
• Work-for-hire firm saving up money from c...
Key mistakes
• Stopped taking owner’s draw - no salary to owners
• Still got taxed on revenue!!!
• Would have been better ...
Never again
• Mission - make sure this didn’t happen to other startups
• Quoc Tran’s background - technical director
• Fra...
Today’s goals
• Intended audience: experienced game developers interested in
entrepreneurship
• Basics of company formatio...
Topics
• Legal
• Financial
• Team
• Corporate Insurance
• Contracts
• Taxes
Legal
Legal
• Legal structure
• Registered agent
• Trademarks
Legal - Legal Structure
• Sole proprietorship
• Partnership
• Limited Liability Company
• Corporation
Legal - Legal Structure
• Sole proprietorship - pros
• Easiest to run for a business with a single owner
Legal - Legal Structure
• Sole proprietorship - pros
• Easiest to run for a business with a single owner
• Sole proprietor...
Legal - Legal Structure
• Partnership - pros
• Easiest to run for a business with multiple owners
Legal - Legal Structure
• Partnership - pros
• Easiest to run for a business with multiple owners
• Partnership - cons
• B...
Legal - Legal Structure
• LLC - pros
• Legal protection from liability
• Some tax benefits
Legal - Legal Structure
• LLC - pros
• Legal protection from liability
• Some tax benefits
• Partnership - cons
• Formalit...
Legal - Legal Structure
• LLC - pros
• Legal protection from liability
• Some tax benefits
• Partnership - cons
• Formalit...
Legal - Legal Structure
• Corporation - pros
• Maximum liability protection
• Can issue stock
• Can raise money
Legal - Legal Structure
• Corporation - pros
• Maximum liability protection
• Can issue stock
• Can raise money
• Corporat...
Legal – Registered Agent
• Receives official notices from state the business is incorporated in
• Mandatory
• Usually must...
Legal – Trademarks
• Protects your company name, game, and key game elements like character
names
• Avoid using similar na...
Financials
Financials
• First steps
• Accounting
• Finance
Financials – First Steps
• Separate personal expenses from business expenses
• Required if you are a corporation
• Good re...
Financials – Accounting
• All about what happened in the past
• How much revenue did I earn?
• Where did I spend my cash?
Financials – Accounting
• Bookkeeping - the act of tracking all of the financial information about your
business
• Trackin...
Financials – Accounting
• Bookkeeping - the act of tracking all of the financial information about your
business
• Trackin...
Financials – Accounting
• Chart of Accounts
• Allocate expenses into categories that let you understand how your business ...
Financials – Accounting
• Chart of Accounts
• Allocate expenses into categories that let you understand how your business ...
Financials – Accounting
• Chart of Accounts
• Allocate expenses into categories that let you understand how your business ...
Financials – Accounting
• Revenue
• Getting paid is important!
• Work-for-hire - how are you invoicing clients?
• Product ...
Financials – Accounting
• Cash accounting
• Just like your pocketbook
• Record revenue when you receive the cash
• Record ...
Financials – Accounting
• Accrual accounting
• Necessary for some corporations if you make over $5 million
• Necessary if ...
Financials – Accounting
• Accrual accounting
• Accounts receivable
• When you send an invoice to a client and they have a ...
Financials – Accounting
• Accrual accounting
• Accounts payable
• When you receive bills, you may not pay them right away
...
Financials – Accounting
• Paying bills
• Set up regular cadence of reviewing bills, tracking, and paying them
• CHECK RUNS...
Financials – Accounting
• Why so much detail?
• Amount of detail you put into your financials is up to you
• In a perfect ...
Financials – Accounting
• Why so much detail?
• Tracking revenue and expense information in detail
• By game
• By platform...
Financials – Accounting
• Why so much detail?
• Tracking revenue and expense information in detail
• By game
• By platform...
Financials – Finance
• Looking into the future
• Finance is all about the future
• What’s my budget for 2017?
• What’s my ...
Financials – Finance
• If you know what’s going on day-to-day in your business, you can start
predicting
• How things look...
Financials – Finance
• Projections
• If you understand your product, you can understand
• How your product will make money...
Financials – Finance
• Example:
• FTP game on Android / iOS that will monetize via virtual goods
• Comparable game perform...
Financials – Finance
• Example:
• Figure out your expected expenses:
• Cost per install (marketing)
• Art
• Music
• Engine...
Financials – Finance
• Example:
• Revenue & Expenses - this is your BUDGET
• As each month passes, see how you are perform...
Financials – Finance
• Investment
• Bigger projects delivered faster means you’ll need money
• Investors are looking for r...
Team
Team
• Employees
• Contractors
• Health insurance
Team - Employees
• Recruiting
• Job postings and interviews
• Plan for what you want to learn about the candidate
• Prepar...
Team - Employees
• Recruiting - legal
• It’s illegal to discriminate on the basis of:
• Race
• Gender
• Religion
• Age
• n...
Team - Employees
• Recruiting - legal
• There are things you are not supposed to ask job candidates
• Are you married?
• D...
Team - Employees
• Tax forms and taxes
• You will need to fill out tax forms for each new employee
• Pay taxes each payrol...
Team - Employees
• Tax forms and taxes
• Depending on the amount of payroll tax you pay, you may need to file quarterly or...
Team - Employees
• Protect your business just in case
• Have employees sign an invention disclosure and assignment agreeme...
Team - Employees
• Payroll
• Making sure your employees get paid is the most important job in a small company
• Not making...
Team - Employees
• Termination
• In most states - employment is at will
• Make sure departing employees get last paycheck ...
Team - Contractors
• Contractors are not employees
• They work under a Contract or Consulting Agreement
• Paid for deliver...
Team - Contractors
• Contractors can’t be treated same as employees
• Otherwise, risk being reclassified by Dept. of Labor...
Team - Contractors
• IRS Criteria
• Uses your tools, equipment, or materials instead of their own
• Receives on-the-job tr...
Team - Contractors
• May be beneficial for contractors to incorporate as LLC
• Clients do not need to file a 1099
• Remove...
Team - Health insurance
• Americans have to have insurance or face a fine under ACA
• Employers with less than 50 employee...
Team - Health insurance
• Types
• Health Maintenance Organization
• Preferred Provider Organization
• Point of Service Pla...
Corporate Insurance
Corporate Insurance
• Corporate liability
• Types
• E&O
• D&O
• Hired Auto
• Non-owned Automobile Coverage
Corporate Insurance
• Corporate liability
• Types
• E&O
• D&O
• Hired Auto
• Non-owned Automobile Coverage
Corporate Insurance - E&O
• Errors and omissions insurance
• Essential if you are doing work-for-hire
• Protects companies...
Corporate Insurance - D&O
• You may add advisors or investors as company grows
• D&O is liability insurance payable to dir...
Corporate Insurance - Hired auto and Non-
owner automobile coverage
• In event of an accident, protects your company if em...
Contracts
Contracts
• Leases
• Vendors
• Work for hire
• Contractor
• Joint ventures
• Publishing
Contracts - Leases
• May make you seem like a “real business”
• Big risks
• Often for long periods
• Highly restrictive
• ...
Contracts - Leases
• Watch out for:
• Restrictions on ability to sublet space in case you need cash
• Early termination ri...
Contracts - Vendors
• Make sure you know who owns the rights
• Any restrictions on your ability to further transfer anythi...
Contracts - Work for hire
• If you are working for someone else, they will likely use their contract
paperwork
• Most impo...
Contracts - Work for hire
• Watch out for warranty provisions for “bug free” code
• Who gets ownership of the work?
Contracts - Contractor
• Non-disclosure agreement
• Consulting agreement
Contracts - Contractor
• Non-disclosure agreement
• Non-disclosure obligations
• Definition of confidential information
• ...
Contracts - Contractor
• Consulting agreement
• Explanation of services to be provided
• When
• Compensation
• “Independen...
Contracts – Joint Ventures
• Work with another company to jointly build a product you share
• Crazy complex - make sure to...
Contracts – Publishing
• Incredibly complex
• Crazy complex - make sure to get legal advice immediately!
Contracts – Final Note
• Once you start signing agreements, you are creating on-going costs
• These will continue whether ...
Taxes
Taxes
• Impact of taxes
• EIN
• Types of taxes
• Deductions
Taxes - Impact of taxes
• Can make the difference between profit and loss
• Don’t pay unnecessary taxes - take your deduct...
Taxes - EIN
• You will need a taxpayer ID number or employer ID number
• You can apply for one online
Taxes - Types of Taxes
• Income tax
• Estimated taxes
• Self-employment taxes
• Sales tax
• Excise tax
• Franchise tax
Taxes - Types of Taxes
• Income tax
• All businesses must file annual income tax return
• Partnerships file an information...
Taxes - Types of Taxes
• Income tax
• Federal income tax is pay as you go
• Must pay the tax as you earn income during the...
Taxes - Types of Taxes
• Estimated tax
• Must pay taxes on income
• May need to pay self-employment tax by making regular ...
Taxes - Types of Taxes
• Self-employment taxes
• When you have employees, you must cover their:
• SS and medicare taxes
• ...
Taxes - Types of Taxes
• Sales tax
• Certain platform providers cover sales tax, iOS
• You must pay the sales tax on reven...
Taxes - Types of Taxes
• Excise tax
• Must be paid if you do the following:
• Manufacture or sell certain products
• Opera...
Taxes - Types of Taxes
• Franchise tax and other state fees
• Texas has a state franchise tax
• This is really just a fee ...
Taxes - Deductions
• Home office deductions
• Travel
• Meals
Taxes - Deductions
• Home office deductions
• If you use part of your home for business, you may be able to deduct expense...
Taxes - Deductions
• Home office deductions
• Requirements
• Regular and exclusive use
• Principal place of business
• Bas...
Taxes - Deductions
• Travel
• Commuting expenses not deductible
• Side trips to customers or suppliers are deductible
• On...
Taxes - Deductions
• Meals
• Regular meals not deductible
• Meals with customers are 50% deductible
• Only if business is ...
Q&A
• Contact us:
• quoc@possuminteractive.us
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Crash Course in Building Your Indie Game Studio | Quoc Tran

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Delivered at Casual Connect USA 2016. You’ve made a great game, now make a great game company! Join other indie studios in a workshop setting to learn the ins and outs of starting, growing and running a business. Key topics include corporate formation, accounting, taxes, employees and contractors, licensing, insurance, contracts, real estate leasing and more. Walk away with a game plan to get started or with a new understanding of critical topics.

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Crash Course in Building Your Indie Game Studio | Quoc Tran

  1. 1. Building and Growing Your Game Business Quoc Tran CTO Possum www.possumbooks.com
  2. 2. I made too much money • Closed previous startup because we made too much money • Work-for-hire firm saving up money from contracts • Cut contracts and focus on internal product development
  3. 3. Key mistakes • Stopped taking owner’s draw - no salary to owners • Still got taxed on revenue!!! • Would have been better off spending money instead of saving
  4. 4. Never again • Mission - make sure this didn’t happen to other startups • Quoc Tran’s background - technical director • Frank Coppersmith’s background - COO and CFO
  5. 5. Today’s goals • Intended audience: experienced game developers interested in entrepreneurship • Basics of company formation and operations
  6. 6. Topics • Legal • Financial • Team • Corporate Insurance • Contracts • Taxes
  7. 7. Legal
  8. 8. Legal • Legal structure • Registered agent • Trademarks
  9. 9. Legal - Legal Structure • Sole proprietorship • Partnership • Limited Liability Company • Corporation
  10. 10. Legal - Legal Structure • Sole proprietorship - pros • Easiest to run for a business with a single owner
  11. 11. Legal - Legal Structure • Sole proprietorship - pros • Easiest to run for a business with a single owner • Sole proprietorship - cons • Owner is personally liable
  12. 12. Legal - Legal Structure • Partnership - pros • Easiest to run for a business with multiple owners
  13. 13. Legal - Legal Structure • Partnership - pros • Easiest to run for a business with multiple owners • Partnership - cons • Both partners are personally liable
  14. 14. Legal - Legal Structure • LLC - pros • Legal protection from liability • Some tax benefits
  15. 15. Legal - Legal Structure • LLC - pros • Legal protection from liability • Some tax benefits • Partnership - cons • Formalities and fees • Costs to close
  16. 16. Legal - Legal Structure • LLC - pros • Legal protection from liability • Some tax benefits • Partnership - cons • Formalities and fees • Costs to close • Added bonus • Tax as S-Corp • Save 16-20% in federal taxes each year!
  17. 17. Legal - Legal Structure • Corporation - pros • Maximum liability protection • Can issue stock • Can raise money
  18. 18. Legal - Legal Structure • Corporation - pros • Maximum liability protection • Can issue stock • Can raise money • Corporation - cons • Headaches of running a separate business • Shareholder meetings • Separate tax return • Corporate formalities
  19. 19. Legal – Registered Agent • Receives official notices from state the business is incorporated in • Mandatory • Usually must have physical address in state that business is incorporated in
  20. 20. Legal – Trademarks • Protects your company name, game, and key game elements like character names • Avoid using similar names within entertainment industry • Search and file online - uspto.gov
  21. 21. Financials
  22. 22. Financials • First steps • Accounting • Finance
  23. 23. Financials – First Steps • Separate personal expenses from business expenses • Required if you are a corporation • Good recordkeeping helps defend you during an audit • Manage tax and business bills more efficiently
  24. 24. Financials – Accounting • All about what happened in the past • How much revenue did I earn? • Where did I spend my cash?
  25. 25. Financials – Accounting • Bookkeeping - the act of tracking all of the financial information about your business • Tracking and paying bills • Following up with customers • Sending out invoices • Paying contractors
  26. 26. Financials – Accounting • Bookkeeping - the act of tracking all of the financial information about your business • Tracking and paying bills • Following up with customers • Sending out invoices • Paying contractors • $50-100/hr for competent bookkeeping services • More if tied into CPA or tax prep firms
  27. 27. Financials – Accounting • Chart of Accounts • Allocate expenses into categories that let you understand how your business is performing
  28. 28. Financials – Accounting • Chart of Accounts • Allocate expenses into categories that let you understand how your business is performing • Categories help you understand where you are spending money • Meals • Engineering • Travel
  29. 29. Financials – Accounting • Chart of Accounts • Allocate expenses into categories that let you understand how your business is performing • Categories help you understand where you are spending money • Meals • Engineering • Travel • Classes let you know which product is costing the most or making the most money • Different games • Different customers
  30. 30. Financials – Accounting • Revenue • Getting paid is important! • Work-for-hire - how are you invoicing clients? • Product revenue - are you downloading and reconciling reports from platform providers?
  31. 31. Financials – Accounting • Cash accounting • Just like your pocketbook • Record revenue when you receive the cash • Record expenses when you make a payment
  32. 32. Financials – Accounting • Accrual accounting • Necessary for some corporations if you make over $5 million • Necessary if you have inventory
  33. 33. Financials – Accounting • Accrual accounting • Accounts receivable • When you send an invoice to a client and they have a number of days to pay • Time between invoicing and payment is tracked as an account receivable
  34. 34. Financials – Accounting • Accrual accounting • Accounts payable • When you receive bills, you may not pay them right away • Net 30 or Net 60 - you have 30 or 60 days to pay before bill is delinquent • Time between bill and payment is tracked as an account payable
  35. 35. Financials – Accounting • Paying bills • Set up regular cadence of reviewing bills, tracking, and paying them • CHECK RUNS are a good time to check health of business
  36. 36. Financials – Accounting • Why so much detail? • Amount of detail you put into your financials is up to you • In a perfect world, you will have many games on many platforms
  37. 37. Financials – Accounting • Why so much detail? • Tracking revenue and expense information in detail • By game • By platform • By category (e.g. art)
  38. 38. Financials – Accounting • Why so much detail? • Tracking revenue and expense information in detail • By game • By platform • By category (e.g. art) • Insight into: • Which games are most profitable? • Which platforms am I most successful on? • How can I best reduce development costs to increase profitability?
  39. 39. Financials – Finance • Looking into the future • Finance is all about the future • What’s my budget for 2017? • What’s my return on investment for different kinds of marketing? • How much money do I need to build my next game?
  40. 40. Financials – Finance • If you know what’s going on day-to-day in your business, you can start predicting • How things look next month • How things look next year • Even if you don’t have historical data, having some estimates are critical
  41. 41. Financials – Finance • Projections • If you understand your product, you can understand • How your product will make money • How much it will cost
  42. 42. Financials – Finance • Example: • FTP game on Android / iOS that will monetize via virtual goods • Comparable game performance available from many sources • Estimate revenue based on: • Players • Conversion to paying • ARPPU • Total Revenue
  43. 43. Financials – Finance • Example: • Figure out your expected expenses: • Cost per install (marketing) • Art • Music • Engineering • Design
  44. 44. Financials – Finance • Example: • Revenue & Expenses - this is your BUDGET • As each month passes, see how you are performing against expectations • Make smart operational adjustments
  45. 45. Financials – Finance • Investment • Bigger projects delivered faster means you’ll need money • Investors are looking for return on their investment • Kickstarter / crowdfunding another option
  46. 46. Team
  47. 47. Team • Employees • Contractors • Health insurance
  48. 48. Team - Employees • Recruiting • Job postings and interviews • Plan for what you want to learn about the candidate • Prepare for topics candidates care about • Salary • Equity • Bonuses • Vacation • PTO • Sick time
  49. 49. Team - Employees • Recruiting - legal • It’s illegal to discriminate on the basis of: • Race • Gender • Religion • Age • national origin • Physical • Mental disability • Don’t say you’re looking for a “young” person to join your staff
  50. 50. Team - Employees • Recruiting - legal • There are things you are not supposed to ask job candidates • Are you married? • Do you have kids? • The only purpose of the info is to discriminate
  51. 51. Team - Employees • Tax forms and taxes • You will need to fill out tax forms for each new employee • Pay taxes each payroll • Employers and employees each must pay Social Security and Medicare tax - 7.65% • Employers may also need to pay federal unemployment tax • May need to pay 6% of the first $7000 in wages for each employee
  52. 52. Team - Employees • Tax forms and taxes • Depending on the amount of payroll tax you pay, you may need to file quarterly or annual returns • Pay your paytoll taxes on time! • IRS moves very quickly when companies are late on payroll taxes
  53. 53. Team - Employees • Protect your business just in case • Have employees sign an invention disclosure and assignment agreement • Makes sure that when employees make content for your game, it belongs to you • Non-competes are non-trivial to enforce but may be appropriate for key leadership personnel • Enforcement of non-compete is tied with theft of trade secrets
  54. 54. Team - Employees • Payroll • Making sure your employees get paid is the most important job in a small company • Not making payroll is the classic event of collapse of a small business • Use a professional service to make this as simple and automatic as possible
  55. 55. Team - Employees • Termination • In most states - employment is at will • Make sure departing employees get last paycheck ASAP • Some states require you to give the last paycheck as they leave • Cut off access to systems and remove company property • Employees may have rights to COBRA • Employees may also file for unemployment
  56. 56. Team - Contractors • Contractors are not employees • They work under a Contract or Consulting Agreement • Paid for deliverables or hours worked • Contractors pay all their own taxes • W-9 form at start, file 1099 each tax year
  57. 57. Team - Contractors • Contractors can’t be treated same as employees • Otherwise, risk being reclassified by Dept. of Labor as employees • Results in big tax consequences for you
  58. 58. Team - Contractors • IRS Criteria • Uses your tools, equipment, or materials instead of their own • Receives on-the-job training • Must follow hours you set • Is told not just what must be done but how the work must be done • Hires or supervises your workers • Receives health insurance, sick pay, vacation pay • Gets a regular paycheck
  59. 59. Team - Contractors • May be beneficial for contractors to incorporate as LLC • Clients do not need to file a 1099 • Removes any ambiguity that independent contractor is an employee
  60. 60. Team - Health insurance • Americans have to have insurance or face a fine under ACA • Employers with less than 50 employees don’t have to provide insurance but are permitted to
  61. 61. Team - Health insurance • Types • Health Maintenance Organization • Preferred Provider Organization • Point of Service Plan • High Deductible Health Plan • Disability • Dental and Vision
  62. 62. Corporate Insurance
  63. 63. Corporate Insurance • Corporate liability • Types • E&O • D&O • Hired Auto • Non-owned Automobile Coverage
  64. 64. Corporate Insurance • Corporate liability • Types • E&O • D&O • Hired Auto • Non-owned Automobile Coverage
  65. 65. Corporate Insurance - E&O • Errors and omissions insurance • Essential if you are doing work-for-hire • Protects companies against claims made by clients for inadequate work or negligent actions • Often covers court costs and settlements for amounts specified on insurance contract
  66. 66. Corporate Insurance - D&O • You may add advisors or investors as company grows • D&O is liability insurance payable to directors and officers of a company • Covers losses or defense costs in the event of legal action brought for wrongful acts in their capacity as directors and officers • Intentionally illegal acts not covered
  67. 67. Corporate Insurance - Hired auto and Non- owner automobile coverage • In event of an accident, protects your company if employee has an accident • Supplements the driver’s own auto liability coverage • If an employee has a serious auto accident while on company business and their personal insurance is not enough to cover, company be held responsible • Claims can be catastrophic • Cost of insurance is less than $150 / year
  68. 68. Contracts
  69. 69. Contracts • Leases • Vendors • Work for hire • Contractor • Joint ventures • Publishing
  70. 70. Contracts - Leases • May make you seem like a “real business” • Big risks • Often for long periods • Highly restrictive • Contain pages of microprint
  71. 71. Contracts - Leases • Watch out for: • Restrictions on ability to sublet space in case you need cash • Early termination rights • Amount of “free” improvements you get on signing and move in • Whether landlord can bump you for another client • Covenants that restrict what you can do • E.g. Covering windows to keep out sunlight interfering with art development
  72. 72. Contracts - Vendors • Make sure you know who owns the rights • Any restrictions on your ability to further transfer anything you’ve bought • When do you have to pay? • Watch your cash flow
  73. 73. Contracts - Work for hire • If you are working for someone else, they will likely use their contract paperwork • Most important provisions • What you have to deliver • When and how • When you’ll get paid
  74. 74. Contracts - Work for hire • Watch out for warranty provisions for “bug free” code • Who gets ownership of the work?
  75. 75. Contracts - Contractor • Non-disclosure agreement • Consulting agreement
  76. 76. Contracts - Contractor • Non-disclosure agreement • Non-disclosure obligations • Definition of confidential information • Return / destruction of confidential information • No announcements • Ownership of confidential information
  77. 77. Contracts - Contractor • Consulting agreement • Explanation of services to be provided • When • Compensation • “Independent contractor relationship” - not an employee • Confidential information • Non-disclosure and non-use provisions • Term and termination • No conflicts of insterest • Non-solicitation • Ownership assignment
  78. 78. Contracts – Joint Ventures • Work with another company to jointly build a product you share • Crazy complex - make sure to get legal advice immediately!
  79. 79. Contracts – Publishing • Incredibly complex • Crazy complex - make sure to get legal advice immediately!
  80. 80. Contracts – Final Note • Once you start signing agreements, you are creating on-going costs • These will continue whether the game makes money • Consider the total costs and whether you can terminate a contract early • Consider how much money you have to make to pay the bills
  81. 81. Taxes
  82. 82. Taxes • Impact of taxes • EIN • Types of taxes • Deductions
  83. 83. Taxes - Impact of taxes • Can make the difference between profit and loss • Don’t pay unnecessary taxes - take your deductions • Know if you are paying business taxes as an individual or paying business taxes separately • Penalties are potentially large for trivial infractions like filing late • Federal and state rules apply BUT terminology is different
  84. 84. Taxes - EIN • You will need a taxpayer ID number or employer ID number • You can apply for one online
  85. 85. Taxes - Types of Taxes • Income tax • Estimated taxes • Self-employment taxes • Sales tax • Excise tax • Franchise tax
  86. 86. Taxes - Types of Taxes • Income tax • All businesses must file annual income tax return • Partnerships file an information return • Depends on how business is organized
  87. 87. Taxes - Types of Taxes • Income tax • Federal income tax is pay as you go • Must pay the tax as you earn income during the year • May need to pay estimated tax
  88. 88. Taxes - Types of Taxes • Estimated tax • Must pay taxes on income • May need to pay self-employment tax by making regular payments during the year
  89. 89. Taxes - Types of Taxes • Self-employment taxes • When you have employees, you must cover their: • SS and medicare taxes • Federal income tax withholding • Federal unemployment tax • When you are reporting your own revenue for tax purposes, you can deduct the taxes that your employer would otherwise pay
  90. 90. Taxes - Types of Taxes • Sales tax • Certain platform providers cover sales tax, iOS • You must pay the sales tax on revenue from other platforms, Android • Only pay sales tax on sales in the same state as a major nexus • Nexus - if your company has sufficient physical presence in a state
  91. 91. Taxes - Types of Taxes • Excise tax • Must be paid if you do the following: • Manufacture or sell certain products • Operate certain kinds of businesses • Use various kinds of equipment, facilities, or products • Receive payment for certain services • Likely only applies to game developers if you have real money wagering
  92. 92. Taxes - Types of Taxes • Franchise tax and other state fees • Texas has a state franchise tax • This is really just a fee for operating a business in Texas • Other states may have similar fees
  93. 93. Taxes - Deductions • Home office deductions • Travel • Meals
  94. 94. Taxes - Deductions • Home office deductions • If you use part of your home for business, you may be able to deduct expenses • Available for homeowners and renters
  95. 95. Taxes - Deductions • Home office deductions • Requirements • Regular and exclusive use • Principal place of business • Based on percentage of home devoted to business use
  96. 96. Taxes - Deductions • Travel • Commuting expenses not deductible • Side trips to customers or suppliers are deductible • Only covers transportation expenses, not repairs • Allowed deductions for food and lodging only if you are staying away from home (your place of business) overnight
  97. 97. Taxes - Deductions • Meals • Regular meals not deductible • Meals with customers are 50% deductible • Only if business is discussed at meal • Expense is not “lavish or extravagant” • Must have a receipt and write who you took and why • Tips are 50% deductible • Meals while traveling away from home on business are 50% deductible
  98. 98. Q&A • Contact us: • quoc@possuminteractive.us

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