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.
by P. Moreau
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Discussion
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- 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.
- 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