Debunkedverified Oct 6, 2026

Flagged: may cross into illegal tax evasion. Shown for discussion only, not endorsed.

Pay yourself a salary to dodge self-employment tax

The claim: incorporate, pay yourself a tiny salary, and take the rest as distributions to avoid self-employment tax. This is aggressive and often crosses into evasion — the IRS requires reasonable compensation.

AggressiveNeeds a professional

by P. Moreau

community verdict

77% debunked
86 votes

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Discussion

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  1. CounterpointJ. Okafor · Aug 28, 2026

    S-corp owners must pay themselves reasonable compensation. Underpaying salary to shift income to distributions is a classic audit trigger.

  2. SupportM. Kessler · Sep 1, 2026

    The IRS requires reasonable compensation for S-corp shareholder-employees.

    IRS — S Corporation Compensation and Medical Insurance Issues. · read the source