Using S-Corps To Reduce Social Security Taxes, Yet Maximize Retirement Plan Contributions

Using S-Corps To Reduce Social Security Taxes, Yet Maximize Retirement Plan Contributions

Income subject to Social Security taxes is known as “earned income”, which can be in the form of salaries from corporations or net business income from single proprietorships and partnerships. (Note: While earned income is subject to Social Security taxes, it is also eligible for retirement plan contributions, whereas non-earned income is not eligible for plan contributions.)

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