How Does An S-Corporation Save Me Money?
If you have read our post about S-Corporations and determining a reasonable salary, you’re probably wondering how S-Corps help save you money. Because it’s a requirement to pay yourself a reasonable salary when operating an S-Corp, savings on your taxes comes into play when your reasonable salary is more than your net income. This lets you take a distribution. Distributions are amounts of cash that you can take out of your business. Distributions are not subject to payroll taxes so by taking a distribution, you save by not paying payroll taxes on that amount of money. When told about this,…