Can an accountant operate as a C corporation and draw a small W-2 to avoid recapture of Social Security income? (D.M., Hickory, NC)

This would be a mistake. Your accountancy C corporation is taxed as a personal-service corporation, meaning that all income of this C corporation is taxed at the maximum corporate tax rate of 35%.1 This tax destroys the C corporation strategy of leaving money in the corporation to avoid Social Security recapture.

Because tax law ... Log in to view full article.