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I am self employed and have been considering, upon the advice of an investment advisor, incorporating as a C corporation.
With the receipts from my clients I would pay myself a salary which would be taxed at the usual personal rate.
I am told that ALL of the other proceeds could be placed into a defined benefit plan and that the corporation would have zero net income after the contributions and therefore would have no taxes on itself.
This almost seems to good to be true. Is it?
Essentially, the other proceeds above and beyond my personal income would go in tax free (until withdrawal of course)and would be far above and beyond what I would be able to contribute in a conventional IRA, SEP-IRA etc.
Any thoughts?
Thank you.
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