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tax-doctor, Tax Preparer
Category: Tax
Satisfied Customers: 637
Experience:  Federal, State and local income tax preparation
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I have an S Corp with two W2 employees, myself and my wife.

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I have an S Corp with two W2 employees, myself and my wife. I take a fair market salary and as the lone shareholder I take distributions. Last year the distributions almost equalled my salary. I've heard that they are cracking down on "disqualified" S Corps. Do you know if this is true?

Secondly, if I don't take distributions do I simply have to take all my money in salary compensation? Or do I try to put a limit on the distributions?
hello, my name is XXXXX XXXXX i'm happy to answer your questions.

the gov't has been looking more closely at s-corps; making sure enough social security taxes are paid through payroll. I have my own s-corp and we take almost all of our compensation through payroll vs distributions. It's just easier for us to do this way and will avoid any potential issues and quarterly tax payments.

only once fully satisfied should you rate my answers, so I'm paid for them.

thank you!
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