S-corp owners often underpay themselves on W-2 salary to save taxes. Set a reasonable salary by looking at last year's distributions and your living expenses. A typical starting range is $60,000 to $80,000, adjusted for your location and business size.
In terms of that specifically, the S-corp and paying yourself, a lot of the questions I get from owners is, should I, how much should I be paying myself? What is a normal salary if I do have an S-corp? What do you see as kind of the happy medium or what do you recommend to someone based on the size of their business, the amount of profit, how much should I be having in distributions versus my actual payroll and like my W-2? What should that be as an S-corp?
I would say that if you're going to become an S-corp, I usually just look at last year's distributions and like what you need to live off of and try to shoot somewhere reasonable around there. Like if you're the owner of your business, you probably shouldn't be the person making the least amount of money. Yeah. So I would say like depending on where you live, normally somewhere between like $60,000 to $80,000 is appropriate to start.
