Can I retain earnings in the S Corp and then invest that in an institutional brokerage account? I want to pay myself a reasonable salary and use the remainder to invest.
Can I retain earnings in the S Corp and then invest that in an institutional brokerage account? I want to pay myself a reasonable salary and use the remainder to invest.
My goal is to (legally) minimize taxes and maximize the amount I can invest. My thinking is that retaining earnings and investing them as an S Corp could be more tax efficient. Is this the smartest thing to do or am I better off paying 60% of S Corp income to myself as a W2 and distributing the remaining 40% as distributions.
Can I retain earnings in the S Corp and then invest that in an institutional brokerage account? I want to pay myself a reasonable salary and use the remainder to invest.
An s-corp is a pass through entity, that means that each years net income is fully taxable to the shareholders (portioned out to the shareholders).
So any retained earnings that you do not take as salary (required) or as distributions is yours to do what you wish, reinvest in the company or take for personal use. But doing so has zero effect on your annual income taxes.
Can I retain earnings in the S Corp and then invest that in an institutional brokerage account? I want to pay myself a reasonable salary and use the remainder to invest.
Super useful response - seems I might as well pass it all through to myself then and just use my personal brokerage account. I'm paying taxes on it, so, I might as well just accept it so I have more control over the funds. Thanks.
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