I have an LLC that will make somewhere around $300,000 in profit this year. I also have a full time job that will make around $200,000 this year. As I understand it, I can file taxes for my LLC as if though it were an S-Corp. In doing so, I can pay myself a reasonable salary (say $125,000) and take the remaining $175,000 as a passive distribution.
The $125,000 would be combined with my $200,000 salary and taxed at a rate of 33% (married/joint). The $175,000 passive distribution would be taxed at what rate?
Like anyone else, I’m just trying to pay the least amount of tax that I can while paying a fair amount required by law… and hoping that the $500,000 or so total $$ I stand to earn this year isn’t all taxed at the 39.6% rate. Any guidance or assistance in this would be greatly appreciated.
The $125,000 would be combined with my $200,000 salary and taxed at a rate of 33% (married/joint). The $175,000 passive distribution would be taxed at what rate?
Like anyone else, I’m just trying to pay the least amount of tax that I can while paying a fair amount required by law… and hoping that the $500,000 or so total $$ I stand to earn this year isn’t all taxed at the 39.6% rate. Any guidance or assistance in this would be greatly appreciated.