Did you elect S Corp status to save on taxes? Smart move, but only if you’re paying yourself the right way! There’s one rule you can’t afford to skip. It’s also the one nobody mentions when they’re bragging about the tax savings!
You’ve probably heard about the S Corp “loophole”: no self-employment tax on distributions. What usually gets left out is the catch. You have to pay yourself a reasonable salary first. So what counts as reasonable? And what happens if the IRS disagrees with your number?
In this video, we break down what the IRS actually looks at, the three steps every S Corp owner should follow to set a salary, and how to document that decision so it holds up under scrutiny. Skip this step, and the IRS can reclassify your distributions as wages, with back FICA, penalties, and interest that can wipe out the savings you were chasing. Watch the full video so you can enjoy the benefits of your S Corp with confidence and keep more of what you’ve earned!