The company doesn’t pay but the owners do. What’s the big deal?
Yeah right
I agree. This forum should be full of people who don't believe in the double taxation that results from dividend distributions from most corporations. S Chapter corporations, assuming one qualifies, are one way to avoid this double-dipping by the government.
The company doesn’t pay but the owners do. What’s the big deal?
They avoid double taxation like most family businesses do.
I’d be more interested if they had schemes to pay owner/managers a salary that was below the Social Security threshold, so that they avoided SS taxes by taking distributions of profits instead of salary. Everybody does that, too, but it looks bad if the numbers aren’t reasonable.
I mostly agree. The difference between a "C" corporation and an "S" corporation is that the regular "C" corporation usually pays more in the form of double taxation--that is, anything the owners take out above and beyond their agreed in advance salaries is taxed both as corporate profit and again as individual dividends.
So, jealousy is the issue!
The 800k loan sounds like a very dirty deal to me
For one thing the individuals only have to pay FICA on what they feel they are worth and do not have to pay FICA on any disbursement at the end of the year.