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S-Corp Reasonable Comp Optimization

Lower your W-2, raise your distribution; save on FICA.

Overview

S-corp owners pay 15.3% FICA on W-2 wages but 0% on distributions. IRS requires 'reasonable compensation' for services. Sweet spot: pay salary at market rate for your role, take remainder as distribution.

Best fit
S-corp owners with $150K+ profitConsultantsProfessional service firms
Estimated impact
$5K–$25K/yr FICA savings

Click Generate advisory deep dive for mechanics, IRC citations, a step-by-step execution plan, a worked numeric example on your profile, costs, risks, and this-week actions.

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