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  • #16
    Technically, you don't have to take all the distributions from the S-Corp accounts, but you are still taxed as though you did regardless.

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    • #17


      The remaining amount is paid and reported as distributions. You will still pay income taxes on the S-Corp’s distributions, but no payroll taxes. This is the source of the you will “save taxes” with an S-Corp. However, you have to balance this saving in payroll taxes with the cost to run the payroll, state annual fees and taxes for being an S-Corp and the accounting and additional fees to file as an S-Corp. So then the determination is, do you save enough in payroll taxes to offset those other costs. Also, even if you do save a marginal amount, is it worth the extra hassle and your personal time to do so. There may be other reasons for an S-Corp, but there again this is dependent on specific circumstances.
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      I agree that for a one person company the S corp may be overkill. But for people who have employees and quarterly payroll fling, annual filing and W2 are part and parcel of doing business. So S Corp adds the benefit of avoiding the medicare taxes on reasonable distributions.

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      • #18




        Technically, you don’t have to take all the distributions from the S-Corp accounts, but you are still taxed as though you did regardless.
        Click to expand...


        Yes, whether it remains in the S corp account or in your personal banking account you are already taxed on it and next year you will be taxed only on the new income for that year in the S corp account. I leave "already taxed" money in S corp to cover expenses rather than have a line of credit.

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        • #19


          I am indeed a physician, finished first year of law school and now finishing the accredited wealth management advisor course. Still this is all theoretical stuff and can’t replace real world answer to a specific issue.
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          I see. You're right - I knew nothing but facts and theories when I finished school (and graduated valedictorian lol). Started my career with a good work ethic and learned everything else on the job.
          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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