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Shrink Your Small Biz Salary And Your Tax Bill

Source: https://forbes.com/sites/kellyphillipserb/2017/06/13/shrink-your-small-biz-salary-and-your-tax-bill/#48d69fb76bc0 - Jun 13, 2017

It's natural to measure success by the size of your paycheck. If you own a business or are self-employed, get over it. You might be able to save tens of thousands of dollars in taxes by cutting your salary.

Newt Gingrich and John Edwards famously used this strategy, and it appears President Donald Trump did too. Moreover, if Trump enacts his proposed tax reform--a big if--the savings from the cut-your-pay ploy will increase exponentially.

Normally, when you receive a paycheck or earn self-employment income (reported on Schedule C of your 1040), you pay not only income taxes but also Social Security and Medicare taxes, also known as payroll or FICA taxes.

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Category: General Business