- I would like to save on self-employment taxes.
I am a board advisor and receive direct payments in my name. I file as a sole proprietor because the companies I work with are not willing to pay an S or C corp directly. Can I create an S corp that I pay a service fee to, and that S corp pays me reasonable compensation as a w2 employee? For the tax professionals, have you seen this legitimately done without violating any irs laws?
Here is an example:
- I get paid $300K per year as a 1099 NEC
- I pay an S Corp $75K in service fees
- The S Corp pays me $30K salary through a W2.
- I receive $45K in dividends from the S Corp