What salary to take for S-Corp
Hi Terry – My S-Corp business has had two very slow years in a row and as a result my accountant says I can take a very low salary this year around just $1,500. She’s suggesting I could take a little more, and this would allow me to invest in my i401k and/Roth IRA but would also increase my tax burden for this year. Does it make sense to take a higher salary and pay more now in order to invest more? I’m 45 so not close to retirement. Thank you.
Terry Says
This is something you should discuss with your accountant. But if you have the opportunity to make some money grow tax-deferred in your 40lk plan AND get a tax deduction that makes sense. I’m not sure about your other income, but a Roth likely makes more sense if you don’t need the deduction for a contribution to a traditional IRA.
Again, a lot depends on your total tax picture.
