A Business Owner Paid Himself a Low Salary for Decades to Save on Taxes.
The Trade-Off Shows Up Now, in a Smaller Social Security Check, and Selling the Company Won’t Fix It
Quick Read – S-corp owners who minimized W-2 salaries to dodge the 15.3% payroll tax built a smaller Social Security benefit base across all 35 counted years. – Selling the business cannot repair the earnings record. Capital gains bypass FICA entirely and never raise the monthly benefit, even by a dollar. – A large sale gain can make up to 85% of Social Security benefits taxable and trigger higher Medicare premiums through IRMAA two years later. – Many financial professionals are salespeople paid on what they push, not whether you end up wealthier. A fiduciary is the opposite.
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