Economists, bankers, and companies have a horrible observe report of predicting credit score bubbles. Not like a partnership, if dealt with correctly, you don’t pay self employment taxes on the profits of the S company. As an alternative, you’re paid a wage, and the relevant social safety, medicare and other payroll taxes are paid accordingly. Any dividends in excess of your salary should not subject to payroll or self employment taxes. So if in case you have a low salary and excessive dividends, you save 15.three{3286f00bede18e46e651a29158158155962814241e64adef0f250e9c7cb9813a} in taxes on the dividend portion. Of course the IRS is aware of this, they usually require you to pay your self a “affordable” wage. How a lot wage it’s best to pay yourself vs. dividend distributions is a a lot debated matter between taxpayers and the IRS, and also affords many opportunities for tax planning. Let’s illustrate. If you earn an expert earnings … Read more