S Corporation Reasonable Salary: What Is It and How Much Is
https://www.picpa.org/articles/cpa-now-blog/cpa-now/2020/12/16/s-corporation-reasonable-salary-explanation
WEBDec 16, 2020 · Say your 100% owned S corporation will make $200,000 in profit prior to any W-2 wages paid to you. Normally, you would take $130,000 as W-2 wages and withdraw the rest as nonwage distributions; the $70,000 of remaining profit flows through to you and your taxable income is only $186,000 ($130,000 W-2 plus $56,000 ($70,000 multiplied by 0.8).
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