Confused about S Corps?
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If you own an S corporation and are actively involved in its operations, the IRS expects you to pay yourself reasonable compensation (aka form W-2). Why? because the IRS wants to collect your self employment taxes (FICA and Medicare) and the only way they could receive their share of your self employment taxes is if you issue yourself a big fat W-2. The IRS is aware of the game some of us play. No paying yourself high enough wages means less self employment taxes goes into

Your S Corp finally started to bring profits and money is sitting in your business account, and you itch to take it out. But how? As you probably heard, the IRS considers an S Corp owner both an employee and an investor. Hence, you move money out of the S Corp in two ways: by paying yourself a salary as an employee and by simply taking money out of the company as an investor. S Corp Salary vs. S Corp Distributions A salary is your employee side of the pay and it is reported o

When we talk about corporations, we either talk about an S Corporation or a C Corporation. There is a huge difference between these two,...