Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Hi Badger:

Sorry for the confusion. I'm definately an S-Corp.

You said: "then the corp pays no tax (at least not at the federal level). Any remainderman net income of an "S" corp. should "flow-through" to you on a Schedule K-1 thus: creating ordinary income for you to recognize; but no employee wages on which FICA/Medicare tax is due."

Is it possible then to take $0.0 as "income" (and avoid all corporate payroll tax on me)and have that included as "flow through", thereby paying only personal income tax and no payroll tax on my income?

The reason I'm confused is that my accountant suggested I go on the payroll to generate a W-2. By doing this, the corporation pays PAYROLL tax on money the corporation pays me. If I didn't go on payroll and took all the flow thru as income, I'd only pay income tax and not payroll tax. What am I missing here?

Thanks for your help Badger!


Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.