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How do I establish a salary for myself as an owner of an S Corporation?

An S corporation owner is required to pay themselves a salary for their services to the company. This can be very difficult to establish however until the end of the year because the net profits are not known. So what we do is we defer payment of any salary until the end of the year so that the net profits can be determined all the while putting aside a certain amount of money to pay the salary. At the end of the year when the net profit can be determined, then the proper salary is paid and a sufficient withholding is made so that you cover the salary payment as well as the anticipated net income from the company.

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