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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (159003)	10/22/2008 10:19:54 PM
From: Cy B	Read Replies (1) \| Respond to of 306849

They can do this by organizing their businesses as S, LLC, or C corps, paying themselves very small salaries and then taking the rest of their compensation in the form of dividends which are not subject to FICA. Doesn't this increase the income tax to the business because they can only take the dividend after paying income tax on the earnings vs. if it were salary, they could expense the salary and lower the business taxable income? Since the marginal income tax bracket for a business is greater than the FICA rate, this would seem counter-productive overall.