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Subject:  Re: S-Type Corp Retirement Plans Date:  1/3/2005  2:59 PM
Author:  saraswati1 Number:  10940 of 15018

I have an S-Corp. Your salary and bonuses are the determining amount for figuring contributions to retirement funds. Distributions are not included. Although I originally paid myself and my partner a lower salary in order to reduce payroll taxes, our accountant advised paying a higher salary and bonusing most of our profits at the end of the year, in order to maximize our retirement contribution capability. This method, in turn, also will lower potential franchise taxes.
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