Retirement tax questions

If you do not participate in the S-corp and are merely an investor, it is not earned income and is not considered compensation for purposes of IRA contributions.  

 

If you materially participate, you must take a salary that is at least (or more than) fair market rates for the work you perform, that is subject to employment taxes and so on.    You can only take a profit distribution if there are additional profits after paying fair wages to all participants.

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