Tax Article - Compensation Issues for Self-Employed S. Corporations

Source: Tax Advisor May 2008

In the Tax Advisor’s May 2008 issue there is an interesting analysis of the economic benefits of maximizing an S corporation’s shareholder’s compensation. This is contrary to the intuitive view that such compensation should be minimized in order to minimize employment taxes. The article discusses a web site that provides a downloadable and interactive spreadsheet to determine the effects of different wages. A downloadable and interactive spreadsheet is available at http://ahwang.pageout.net. Under Research/Course Content/Taxation you can the comparison of income from two S corporations and an illustration of the effects of different wages in the S-Corp Wage Spreadsheet.

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