Joe Biden used this strategy to trim his tax bill. You can, too.
The former vice president and his wife reported close to $10 million in income in 2017 from their two S-corporations, CelticCapri and Giacoppa. The entities reported $3.2 million in income in 2018. S-corp employee shareholders can collect a salary — which is subject to payroll taxes. They can also receive a distribution, which is deemed a tax-free reduction of basis. Business owners are subject to a self-employment tax of 12.4% for Social Security and 2.9% for Medicare.
If you’re an entrepreneur looking to save a few bucks, consider borrowing a tax-planning tip from Joe Biden. The former vice president and 2020 presidential contender and his wife Jill Biden reported about $10 million in income in 2017 from a pair of S-corporations, CelticCapri and Giacoppa. The two entities were paid for the couple’s book deals and speaking gigs. The S-corps reported another $3.2 million in income in 2018. While both S-corps generated a lot of income, they paid out modest salaries in comparison. In 2017, the two companies paid the couple a combined $245,833 in wages. This increased to $500,000 in 2018. That mean any amounts the Bidens received as a distribution wasn’t subject to the 15.3% combined Social Security and Medicare tax.
https://www.cnbc.com/2019/08/06/joe-biden-used-this-strategy-to-trim-his-tax-bill-you-can-too.html
Joe Biden Used Tax-Code Loophole Obama Tried to Plug
https://www.wsj.com/articles/joe-biden-used-tax-code-loophole-obama-tried-to-plug-11562779300
Joe Biden's two S-corporations, CelticCapri and Giacoppa don't recall seeing this piece of information previously, interesting..