The that's what I would recommend.
Sometimes he S-corp can be better for raising capital from new shareholders
... or save a little bit on self employment taxes by having some of what comes to you be distribution
of profits on a K-1, over and above a salary.
But in your case it's that small investment income limit that's hurting you I believe.
See this (and note the last line) from IRS:
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Preview of 2013 EITC Income Limits, Maximum Credit Amounts and Tax Law
Here is a preview of the 2013 tax year income limits, maximum EITC amount and the EITC-related tax law changes.
Preview of 2013 Tax Year
Earned Income and adjusted gross income
(AGI) must each be less than:
$46,227 ($51,567 married filing jointly
) with three or more qualifying children
$43,038 ($48,378 married filing jointly) with two qualifying children
$37,870 ($43,210 married filing jointly) with one qualifying child
$14,340 ($19,680 married filing jointly) with no qualifying children
Tax Year 2013 maximum credit:
$6,044 with three or more qualifying children
$5,372 with two qualifying children
$3,250 with one qualifying child
$487 with no qualifying children
Investment income must be $3,300 or less for the year.
Another thought would be to pay yourself all in salary and take no (dividend from the k-1)