self-employment taxes are only applied to a capped part of your profits ($118,500 in 2015) [0] s-corp distributions are taxed as ordinary income (not capital g

self-employment taxes are only applied to a capped part of your profits ($118,500 in 2015) [0] s-corp distributions are taxed as ordinary income (not capital gains) [1] even though long term capital gains rates don't apply in this case, you cited an incorrect number. they peak at 23.8% not 15% [2] [0] https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes https://www.irs.gov/businesses/small-businesses-self-employe... [1] https://turbotax.intuit.com/tax-tools/tax-tips/Small-Business-Taxes/How-an-S-Corp-Can-Reduce-Your-Self-Employment-Taxes/INF22938.html https://turbotax.intuit.com/tax-tools/tax-tips/Small-Busines... [2] http://www.taxpolicycenter.org/briefing-book/how-are-capital-gains-taxed http://www.taxpolicycenter.org/briefing-book/how-are-capital...