[Alberta's Child]

Were you organized as a corporation, or as a sole proprietorship? A sole proprietorship technically doesn't pay any dividends -- so all your income is taxed as income.

In the case of corporate ownership, there may be some regulations that are put in place to restrict how much you can pay yourself in dividends compared to what you pay yourself in salary. You can sometimes get around this by listing family members as shareholders and paying them dividends, too. Just make sure you have little Johnny buy his own school clothes and maybe spring for groceries once a month, if you know what I mean -- it's "his" money, after all.

[freedumb2003]

Were you organized as a corporation, or as a sole proprietorship? A sole proprietorship technically doesn't pay any dividends -- so all your income is taxed as income.

In the case of corporate ownership, there may be some regulations that are put in place to restrict how much you can pay yourself in dividends compared to what you pay yourself in salary. You can sometimes get around this by listing family members as shareholders and paying them dividends, too. Just make sure you have little Johnny buy his own school clothes and maybe spring for groceries once a month, if you know what I mean -- it's "his" money, after all.

I had both but it never occured to me to try to reduce my hit there. Good advice for everyone -- thanks

[Atlas Sneezed]

They are totally rigid and totally uninterested in opposing points of view. In our modern complex world, fundamentalism is dangerous because of its rigidity and its imperviousness to other ideas.

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There are no hard and fast regulations. The salary must be "reasonable." But it is an excellent way to reduce the burden of SS taxes.