Article Date:
October 2014

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How S Corporation Owners Can Cut Taxes by Keeping a Lid on Their Salaries

Estimated Tax Tip Savings: Depending on your own salary and profit distribution levels, we’re typically seeing cases in which the S corp. owner can legally slash personal payroll taxes by $8,000-$20,000 over the coming year.


The number one way for S corporation owners to pay lower taxes is to set the right salary. To do this, you want to find your salary sweet spot—an amount that is low enough to save significantly on payroll taxes, but high enough to satisfy the IRS and avoid the risk of an audit.


Here’s the principle: The lower you set your salary, the more you save in payroll taxes. However, if you set your salary too low, the IRS can step in, exposing you to back taxes, penalties and interest.


To protect your S corporation from IRS intrusion, yet maximize your take-home compensation, you need to follow ... Log in to view full article.

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