Top 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

Top 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.