How do you pay yourself in an S-Corporation?

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According to the IRS, you need to pay yourself a reasonable salary.

But what in the world is a reasonable salary?

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And shouldn’t you want to pay yourself the highest salary possible?

Like why is this a thing?

Well it’s a thing because by paying yourself a very low salary in a S-Corporation, you are effectively lowering the amount of taxes you pay.

And then, on the backend, you can pay yourself with a distribution and not pay self-employment taxes because s-corporations don’t have to pay them anyway.

So stay tuned for this full video to learn the rules & stipulations regarding how to pay yourself in an S-Corporation.

Outline:

Intro: (0:00)
What is a S-Corporation?: (1:40)
Why elect S-Corp Status?: (2:15)
How to Pay Yourself in an S-Corp: (3:10)
What is REASONABLE COMPENSATION?: (5:06)

Watch this next: You're an S-Corp, Now What?    • You're an S-Corp, Now What? | Steps t...  

Resources:

How to Pay Yourself as a LLC:    • How to Pay Yourself As An LLC [By a C...  

LLC vs. S-Corp:    • LLC vs S Corp: Which one should you c...  

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