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> the same income is essentially taxed twice What about if you pay yourself as a W2 employee? Then, isn’t your salary treated as an expense of the corporation
by mbreese 6y ago
> the same income is essentially taxed twice
What about if you pay yourself as a W2 employee? Then, isn’t your salary treated as an expense of the corporation and thus only taxed at the personal level?
- URSpider94 6y agoThat's correct, if you pay yourself, that's an expense for the company and deducted from taxable income. And you'll pay personal income tax on it.
- Digory 6y agoTop Federal rate for W2 income: 37% + 2.9% Medicare + 12.6% on the FICA portion. Top Federal rate for dividend/profit distribution: 20% All other things being equal, as the company earns more than your base wage, you want it to be treated as dividend income.
- deleted 6y ago[deleted]