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>I've written a few times about how the different tax rates on income, vs dividends vs interest income vs capital gains, and even business vs personal tax rates all work together to ensure the 1% come out ahead of the average income earning individual.

I don't think that's right. If you look at the dividends in isolation, it looks like a low tax rate. But if you ask "what's the tax rate on capital income?", then you have to adjust for the fact that, before the capital can pay out anything, the investment must pay taxes on profits (35%), taxes on dividends (15%), and taxes on undistributed gains when selling (capital gains, 15-35%).

So, trace out the taxes on a $100 investment that miraculously pays for itself and throws off $200 in profits on top and pays $50 as a dividend. I exit the position. How much was I taxed at?

$200 profits -> $70 in corporate income tax. (35%)

$50 dividend -> $7.5 dividend tax. (15%)

$115 capital gain (it retained $115 of the $200 profits, raising its market price by that much) -> $17.25 capital gains tax (15%)

Total investment (capital) income: $200.

Total capital income tax: $94.75 (17.25 + 7.5 + 70)

Total capital income tax rate: 47.3% (94.75/200).

(That understates it since you can't deduct inflation.)

And keep in mind, investment is believed to have positive externalities!

Wealthy investors do not pay anything close to 47.3% on their capital gains. Looking at the statutory rates is ridiculous.

It's not at all true that "before the capital can pay out anything, the investment must pay taxes on profits." Familiar examples are commodities, Bitcoin, REITs, Amazon in the 90s, carried interest. Hell, I have a friend who makes a living buying stuff at flea markets and reselling stuff on eBay - that's capital gains.

But below that there's a whole industry devoted to transforming ordinary income into capital gains, like the Ernst & Young Contingent Deferred Swap (which they landed in hot water for). This is the sort of malinvestment that differential taxation encourages.

Yes, but let's take the path of income, if you're an investor in a company. So company does work, makes gizmo, whatever, and gets out of this x, and makes costs of y. So the basis of the income of the investor is x-y, let's call that z.

Ok. Most, but not all, companies would pay VAT on z. 10% in the US, 20% in Europe. That reduces the income from z to, let's call it 85% z.

Then there's corporate tax. 35%. That makes it 55.25% z. The result of this is then used for dividends, which are then taxed at 15%. That makes it 46.9% z. So there's a tax rate for these investments of somewhere near 53% or so, and I bet it'll be more in practice.

Also, the odds of getting an IRS audit if you have a company go up 10-fold.

So the base taxes on corporate profits are higher than income taxes, no ? What am I doing wrong.

That's the nominal corporate tax rate not the effective tax rate which is closer to 18.6%.

Also you're dividing by 200 when you made 250.

My calculation with those two corrections give 27.6% which is lower 13%

20018.6% + 200(1-18.6%)15% + 5015%

37.2 + 24.42 + 7.5 = 69.12 / 250 = 27.6%

Marginal Tax rate for 38k-90k = 40.8%

                      90k-110k = 43.8%

                      110k - 190k - 28%

                      190k- 420k - 33%

>That's the nominal corporate tax rate not the effective tax rate which is closer to 18.6%.

That's with journalist accounting where they reject valid expenses to "prove" that the tax rate is lower.

>Also you're dividing by 200 when you made 250.

No -- the investment paid for itself (the 100) then earned 200 (the amount above what I invested), then paid 50 out of that as a dividend.

It looks strange because it doesn't make sense to tax for distributing the already-taxed profits, and yet people still think the 15% tax on the distributed part of the taxed profit is too low(!), specifically because they ignore the taxes it already had to pay -- that was the point.

Silasx do you think it would be better if they taxed capital gains as income and dropped the corporate tax rate?

Oh whoops I messed up with the 250. You're right it should have been 200.

The 18.6 number doesn't come from journalists though but from the CBO. And these numbers are in line with similar studies by other entities.

I'm sure you agree that its not just how much your taxed on profit, but also how much profit you had to record that matters.

> I'm sure you agree that its not just how much your taxed on profit, but also how much profit you had to record that matters.

If you're a retailer and you buy 1000 widgets at $9 and sell them at $10, then pay $350 in income tax, is your effective tax rate 35% or 3.5%? Can you see the problem if the government demanded 35% of total revenue instead of total profit?

What you're no doubt complaining about is the fact that many of the deductions can be gamed. But that doesn't mean you can discount the legitimate ones.

A more apt analogy is imagine you are selling 1000 widgets @ $10 that you bought for $9 in two different countries.

One country taxes you 20% but you can't mark down the depreciation of the building you're using so you're taxed $200 of your $1000.

The other country taxes you 30% but you get to mark down the $500 depreciation of the building you're using as an expense so instead you record $500 profit. Which means you're taxed $150.

You can see how even though the statutory tax rate is higher in the first country the effective tax rate is lower in the second.

Different tax jurisdictions have different allowable expenses and deductions, which mean your recorded profit can be different between them. The U.S. has an especially high statutory rate, but also allows for many more deductions and expenses than other countries. The effective tax is how you take into account these differences in deductions and expenses between countries, and the U.S. has one that is in the middle of the pack.

The problem with considering things that way is that then you can't compare countries unless they have identical economies.

Suppose two countries have exactly the same tax law. One of them is full of online retailers and the other is full of brick and mortar retailers. Maybe the second country has an oppressive package delivery monopoly. The brick and mortar retailers charge higher prices and have higher expenses (more employees, more real estate) and payroll and rent are deductible in both countries.

So the online retailers can make the same dollar amount of profit on lower revenue and expenses and as a result that country is considered to have a higher effective tax rate, even though their tax law is identical, because their economy is composed of a different type of companies.

And no two countries have the same economy, so you end up measuring something that can't usefully be compared with anything.

Effective tax rate as percentage of total income is a concept that originated in personal income tax, where it makes sense because the default is for expenses to not be deductible from personal income. But for business the default is the opposite. What expense is a business entity going to have that isn't a business expense? Which means that effective tax rate for a business is primarily a question of what percentage of revenue is profit.

Corporations don't care what the nominal tax rate is, they just care how big their tax bill will be if they incorporate in different jurisdictions. They care about the average and the effective. They care about the average for long term investments and the marginal-effective rate expansions of projects in countries they already operate in. And while the U.S. statutory rate is highest in the developed world by a good margin, the effective and average rates are close to top quartile.

Most small to medium corporations are organized as pass through entities so they don't have to pay the corporate tax rate.

Also parking profits in different companies doesn't affect the average or marginal effective tax rates because effective and average tax rates are only computed using the profit. And parking cash in offshore subsidiaries doesn't get recorded as profit for the U.S. corporation.

You've argued that effective/average rates depend on the type company. But the amount you pay in taxes depends on what type of company too. So this is a feature not a bug. For instance how many buildings do you own, how much debt you have, how much and what types of equipment do you own. All of these things affect how much you pay in taxes so of course they affect average and effect tax rates but not nominal rates.

My point is corporations care more about average and effective tax rates because they are more representative of what they will pay than nominal tax rates.

Here is the paper which lists the methodology the CBO used. https://www.cbo.gov/system/files/115th-congress-2017-2018/re...

> Most small to medium corporations are organized as pass through entities so they don't have to pay the corporate tax rate.

In which case they can't defer paying personal income tax to much the same effect.

> Also parking profits in different companies doesn't affect the average or marginal effective tax rates because effective and average tax rates are only computed using the profit.

They reduce their profits in the higher tax jurisdiction by paying more for products or services from a subsidiary in a lower tax jurisdiction, which lowers their effective tax rate because the cost paid to the foreign subsidiary is a deductible expense which reduces their tax burden.

> You've argued that effective/average rates depend on the type company. But the amount you pay in taxes depends on what type of company too. So this is a feature not a bug.

It is a bug if you are trying to compare effective tax rates between countries that have different types of companies, because you end up comparing company types instead of tax codes.

> My point is corporations care more about average and effective tax rates because they are more representative of what they will pay than nominal tax rates.

They obviously care about their own effective tax rate, but that may have little or nothing to do with what companies in other lines of business that represent the country's average are doing.

Moreover, they care about all the details of the tax code, and make decisions based on it. High property taxes cause companies to avoid/minimize owning real property, high income/profit taxes cause companies to avoid reporting profits in that country, high consumption taxes cause companies to conserve resources or acquire them offshore, etc.

Do you think their tax rate will be closer to the average tax rate or the statutory tax rate?

> Do you think their tax rate will be closer to the average tax rate or the statutory tax rate?

They are independent variables. The statutory tax rate could be 35% and the average 15% and the company could pay 34% or 3% depending on the nature of their business.

You're still ignoring the fact that the effective rate depends on the company type. The US is a great market for international companies because they can hire educated US workers to design their products and then manufacture elsewhere and sell those products to US consumers, in a way that most of the profits go to offshore subsidiaries. And so we have a lot of those companies here and it brings down the average.

But the US is quite horrible for small and medium sized companies who actually do pay the high nominal rates because they have no foreign subsidiaries to park profits in.

They're currently trying to close a couple of those loopholes here in Canada, and it's surprising how much traction the complaints against the reforms are getting. The opponents are claiming that the reforms are going to devastate family doctors and family farms. The complaints are mostly bogus, but people don't understand tax law so are vulnerable to an emotional plea.

That's eerily similar to what's happening in Australia - our opposition (which will probably become the Government in the next election because the current one is polling terribly) has announced some measures to close off some tax loopholes around family trusts and property speculation (negative gearing of residential property combined with the capital gains tax discount). The measures are well thought out and I believe have even been recommended by multiple independent reviews of our tax system.

But the current Government and part of the media are attacking it on emotional grounds, like talking about how removing tax dodges that mostly only benefit the highest income earners is an attack on something used by "nurses and teachers trying to get ahead"...

As someone who works at a startup and has interacted with many others, there is some merit to the claims. I agree that these loopholes should be closed and the tax system reformed, but I think we should be careful to do it in such a way that doesn't negatively affect e.g. companies like the one I work for, which went from three people to 70 and millions in revenue in just a few years.

Especially as Vancouver is trying to build its tech and entrepreneurial ecosystem, it's important to ensure that we aren't driving away or hindering small businesses to grow while also not letting huge corporations like TD, Telus, or Apple get the biggest benefits from the tax system the more money they have.

Since you pay taxes on profits and not revenue how would they impede growth? Money reinvested is tax free.

Money is reinvested tax free for a c corp. That is not always true.

https://mobile.nytimes.com/2012/04/29/business/apples-tax-st... https://motherboard.vice.com/en_us/article/pga739/apple-avoi... should have the loopholes which allow them closed.

Can you expand? Which particular change would affect your company? In no way should any of those changes affect a fast growing company. I doubt investors would be very happy if your founder was giving unearned dividends to family members. Your founder shouldn't be locking up capital in long term passive investments. Your founder probably isn't particularly worried about evading estate taxes.

The reforms are for business eligible for the small business deduction, sp isn't it mainly business at the doctor/farmer/incorporated contractor level?

I am confused. If you put your bonus into a corporation, you will have to pay tax twice, the corporate tax and your personal tax. And if your corporation is an LLC, it all flows through to your personal taxes anyway. So, I don't see how you shelter this just by putting into a corporation.

Salaries (and bonuses) are considered expenses for the company and will be tax deductible.

I believe the example was that you may as a contractor (with your own company) receive a bonus to your corporation and be able to offset taxes for another 11 months compared to having the bonus paid out personally.

Working as a contractor for your wholly-owned company would never pass muster with the IRS. You might be able to avoid audit for a little while, but when this catches up to you it will be a huge mess. They would recast the transactions (they can do this) and you'd end up owing a ton of tax and penalties.

Source: I'm a (former) tax lawyer.

So you're not allowed to be self-employed by a corporation that you own yourself in the US? I thought this was pretty normal practice for contractors, especially in IT.

I own my own company where I do contracting work for clients and the income goes to the company. I might have misunderstood or phrased myself badly above.

You’re allowed to be employed by the company you own as an employee, but not as a contractor. You’re a “contractor” from the perspective of your clients, but to your own company (if you made one), you’re an employee.

I think that he meant that you would be an employee of the corporation. The corporation would then be the contractor for someone else.

I'm still not convinced that this works, but that is how I read it.

That's why you pay yourself a small, but not alarmingly small, salary W2 and take the rest on your K1 or such.

The IRS routinely audits people for not paying themselves a market salary in order to shift income to another category. So in playing this game, you have to factor in the likelihood of audit, cost of defense, and cost of penalties and interest that could be assessed.

In the hypothetical scenario of the op, he has 100k as a salary. Which the IRS would not ever likely contest. Since it gets you close to paying out your full ss tax anyway. (since ss tax cuts out somewhere around 115k or so).

And it is also enough for almost any profession. Even CEOs of small companies earn in that range.

If there are job listings in your area for that salary it's market. I pay myself $80k. When I get audited it won't be for that.

no but instead of taking out the money to pay yourself, you just buy things as assets of the company therefore reducing tax exposure.. at least thats the way I have heard of.

You have to prove to the IRS that the asset is used 100% for work. If it's not 100%, you have to show documentation for arriving at that specific interpretation of a split. That's why buying a whole house to live in and writing it off won't work, but claiming 10% of the square footage of the house that's used for business (and business only) will.

Unless you feel very comfortable with IRS regulations and annual changes in them, you have to pay a business CPA to run the numbers, and in many cases the added complexity is just not worth it.

This is called "piercing the corporate veil" and will not only get you in trouble with the IRS but will also mean if you're ever sued you won't get any of the normal protections to your personal assets that you would expect from doing business as a corporation.

Protecting yourself in a single owner corporation or LLC would require extraordinary discipline and bookkeeping. The protections offered by an LLC or corporation to a single owner are generally overstated.

In other words, the corporate veil will be pierced either way.

It's not that bad. I keep a separate credit card, laptop, and office for company use.

assets are not expenses. (that's why it called assets)

some assets can be depreciated over years. some small assets (like printer, laptop) - can be written off in one year... but amount you would save on it is negligible.

Asset purchases are expense. It's a way to get cash out of a company to avoid paying taxes.

Money launderers will sell themselves electronics at a 5-10x markup on Amazon, for example, to get the cash out.

This is Cost of Goods Sold (this is an expense)

To get there you need to acquire Goods to Sell first.

Either way, it is not applicable to what parent was saying. What typically people mean in these situations is that "I can buy a car in the name of my corporation tax free, I can replace home AC unit in the name of corporation tax free" etc. And that is very wrong.

(I am here talking about accounting meaning of word "expense")

This is yet another barrier to entry for the working class. If the poor try to use tax loopholes they get nailed. The rich can afford tax lawyers to make sure they're doing it right.

For low to middle incomes there's rarely a case where itemizing beats standard deduction.

yes, but if you have your own corporation, unless it's an LLC, then you will have to pay corporate tax on that income in addition to personal income. And if it's an LLC, there is no difference.

^^^ this. In fact in the US the IRS will flag abnormally high salaries for small businesses (millions per individual) if no or very few dividends are paid out because income tax is less favorable to the government in the total amount the IRS receives when looking at multi million dollar salaries. Beyond the first $110kish FICA stops making a dent as social security caps out. I'm sure there are possible loopholes for very wealthy individuals but this article doesn't detail them and I'm not familiar with them either. This is the opposite of other places like Sweden where high income tax and low business taxes make dividends very favorable, and the tax authorities there will question paying dividends at too low of income levels.

People often forget about S-Corps. As the owner you W-2 yourself, then what is "left over" is a dividend. Since an S-Corp is a pass-through entity, you don't pay corporate taxes, and aren't getring the C-Corp double tax on your dividends.

On the dividend, you don't end up paying toward FICA. Effectively saving you up to 15.3%.

IRS rules stipulate you have to be paid a "reasonable" compensation, which most accountants I've talked with define as within 30% of average wage for your "profession".

So the average programmer US wise makes something like 90k I believe (haven't checked in a few years).

You are saying if you ran a 1 man SAAS app and made 200k in a year, you would w2 yourself for 30k and take a 170k dividend?

I am not sure my accountant would like this plan. Taking say that 90k or 100k might be plausible, but 30% of the average wage?

(And at the 90k point.. FICA goes away past 110k anyway, so the savings is fairly minimal)

I think what he means is that your pay must be within 30% of the average wage. So you could likely pay yourself between 63k and 113k if the average wage was 90k.

Actually, the $30k COULD be reasonable if you are at that point only being a marketer.

If you go on indeed or glassdoor, search what ever your main task is, and screen grab that average salary. Keep searching until you find one that works best for you.

Change your salary with each task by being an hourly w2 employee with different charge codes based on the task. Just make sure you track what work you are doing.

(IANAL/A)

I'd set up a solo-401k and take 20% of that ($40k) as a profit-sharing retirement plan between the "employer" and "employee". Add in a $18k elective contribution out of your W-2 wages as well. IIRC there's a maximum total contribution of $56k so this doesn't work particularly well past the $180k net profit point or so.

I'm seriously considering moonlighting as a freelancer just to get access to this kind of setup. Of course, my daytime employer not having a 401k makes a big difference - with the combination of the profit-sharing and employee elective contribution, the first $22.5k annually would go directly into a tax-deferred retirement account. Partner up with different people to run unrelated businesses, and you can set up a profit-sharing plan with each to get separate "20% up to $56k/yr" buckets.

Anyhow, I'm kind of rambling. My point is that when you wear both the "employer" and "employee" hat, there's some really good options that open up that most employers don't offer because it's a wealth-transfer from employer to employee.

More like $60k. But no, your accountant will not go for anything even remotely risky. Accountants are notoriously conservative. No accountant is going to stick their neck out for their average customer.

You have to pay the big bucks for the guys willing to push the envelope. And that's not be ause they are better, it's because they have to make more money to offset the risk to their career.

i went through calculating it. that works only for narrow range of revenue/profits per year. if you max out fica taxes, you are at loss, since s-corp still pays its half of employee taxes. on top of it whole uncertainty of "right" amount of salary and possible audits made me steer away from converting my llc into s-corp.

So while it might work for some - it is not a major "loophole" for top 0.1% (not even for top 1% i think)

It saves me accounting fees for the year ;). It comes out to just under $4k in savings for the year.

Not a major loophole, but its a nice little bonus.

> On the dividend, you don't end up paying toward FICA. Effectively saving you up to 15.3%.

The dividend is taxed at 15% for incomes over $37,950.

That is for a Qualified Dividend. S-Corp Dividends are "ordinary", and are taxed as regular wages minus FICA/Self Employment Tax.

Don't you lose some of the benefits associated with filing as self-employed? E.g., health insurance premium deduction, ability to defer a larger portion of the income into SEP-IRA?

In an S-Corp as a "2% Owner," you are still granted the insurance deduction, but only if no one is qualified for a health plan through their employer.

"A 2-percent shareholder-employee is eligible for an above-the-line deduction in arriving at Adjusted Gross Income (AGI) for amounts paid during the year for medical care premiums if the medical care coverage was established by the S corporation and the shareholder met the other self-employed medical insurance deduction requirements."

https://www.irs.gov/businesses/small-businesses-self-employe...

Corporations have to pay quarterly estimated taxes.

So do most contractors.

So do most very wealthy people. Rule of thumb (possibly law?): if you will owe more than $1000 at tax time, you have to file quarterly.

Could you link to any "for dummies"-type resources that show how you can incorporate and use that corporation to reduce your taxes? Something that would hopefully be applicable to your typical middle-class homeowner in their 30s with young kids and a 9-5 making enough to get by but is looking for any edge they can find?

Edit: (in the US)

Tax shelters are not made for people like you.

The middle class is best served by collective bargaining to increase their wages and benefits, strong consumer protections, and access to affordable health care.

Up to about your first 5-10 million (depending on where you live) you need to play by the rules. After that, you can think about hiring a tax advisor to start scamming the system. But the downmarket financial advisors that serve people with a paltry million or two are mostly focused on selling high-commission financial products.

There are tax shelters and loopholes for upper middle class workers. The whole tIRA -> Roth IRA conversion is a trivial way to avoid the Roth IRA income contribution cap. The 401(k) system is itself a tax shelter, and is a larger portion of middle class earners' salary than it is for those with tens of millions. Need I mention HSAs which are like triply-tax protected?

Retirement savings is tax advantaged, however most people consider that a feature of the tax code, rather than a loophole. The traditional to Roth conversion will be of benefit only to those whose post-retirement income puts them in a higher tax bracket than they are currently in. Most middle-class wage earners would not be in that category unless they keep working well into retirement age.

Health Savings Accounts are highly dependent on the circumstances of the individual. Many people with employer-provided health care plans receive minimal benefit from an HSA.

That being sad, you've made you point, in that there are portions of the tax code with deductions accessible to the middle class, like home interest deductions and deductions for charitable giving.

But the, "I'm going to start 12 shell companies and park my money offshore" kind of tax dodges are not really feasible until after your first ten million.

The traditional to Roth conversion can help those who remain in the same bracket as well. This is because by spending Roth dollars one can avoid pushing one's taxable income into the next bracket. Technically, that's what you said, but this can be a significant issue even if one's expenses don't require that income, because of RMDs for tIRA but not Roth IRA. Likely to be an issue for those in the low-single millions of assets which is actually quite a few people who consistently save a large portion of income.

The OP mentioned starting their strategy when they were 25, implying they are/were a "normal" person, which is why I asked, since my vague understanding of the situation in the US matches what you describe, that you have to have gobs of money to begin with before you can really start gaming things.

It sounds like what they are doing may not be 100% audit proof. Do you want to play the shady taxes game and hope you don't get caught?

I will agree with brianwawok. Amount of BS I hear from friends "optimizing" their taxes is staggering. Be very careful about any advice you receive from such entrepreneur. Most of them either breaking laws, or breaking IRS rules, which, unless you got plenty of time and money to challenge in the court, is equivalent of laws for you (I guess until you get to these 10m+ where you can afford to fight IRS - I am not there yet, so can't comment)

No link, but the gist in the US is this:

1) Start Business

2) Get Real Clients to buy your stuff

3) Deduct Expenses

4) Pay 40%* of whatever is left over to the Government

* The 40% number can go up and down depending on your income amount [and local tax commitments].

That doesn't reduce your taxes, that just has you personally take on the accounting for an enterprise.

It would only work if you could relabel personal expenses as a business expense, which is what I think the parent was looking for (and which is a time-honored practice with its own dangers, of course, but is hard for the IRS to stamp out entirely -- you "lose" a "business" pen and keep using it for personal stuff; how does the IRS know?).

Use a company car, and company pay for gas. You can deduct that as expense.

Company phone. Company pays your data plan. Deduct.

You register your company at home, okay you can make an office, you can then deduct some expense as facility operational costs. (Of course there are a lot of regulations for this, and you have to document how big the office is, and it can't be bigger than X% of the house, otherwise it'd be income tax hiding - because it'd be the company paying your rent or just giving you money to heat your bedroom, which is not a business expense.)

Company sends you overseas on work? Business expense. But if you go there for 2 weeks and then post beach photos on Facebook for every day, you're in big trouble.

What is that responding to? I said it has its own dangers and the IRS stamps it out but there are some minor ways where it cant.

I wouldn't consider these minor.

As always talk to an accountant.

But, the 'deduct expenses' will help reduce taxes.

Start by getting paid on a 1099 instead of a w2

Which means immediately higher taxes because you get to pay the employer side of payroll taxes, plus no pretax benefits like health care and no vacation or other untaxed benefits.

You can elect to have your LLC taxed as an S-corp to avoid some of the self-employment tax [1].

1. https://www.thebalance.com/what-is-a-reasonable-salary-for-a...

this applies to the certain degree.. if you make less than FICA threshold - yes, you are right. If you make more from multiple contracts/jobs - it is more efficient to be paid as contractor (assuming that client will pay you your employee taxes share, which would otherwise be paid by employer in case of W-2 employment)

I wonder then why those Uber drivers so adamantly oppose a path to riches.

Because if you are a contractor then it's your responsibility to provide healthcare for yourself and think of the costs of that and factor that into your prices.

But if you don't set your prices, because you're a one-of-a-million driver, then you're shit out of luck.

This is very true. The hard part is we need corporations to create jobs, provide housing and finance company growth. You get what you reward and optimize for. The problem is that we aren't optimizing for the right things. I think we need to drop things such as "like kind exchange" and find new ways for people to use their retirement to start business but with tax forgiveness if it fails that could be used to refund retirement.

> we need corporations to create jobs

Not really. Sure, we need some form of association to hold property, and sometimes limited liability. Does it need to be the kind of corporations we have now, able to exercise all the rights of people but not taxed or held accountable like people? Nope. A deep reform in all of the laws defining what "corporation" means, and not just tax laws, is overdue.

> If you invest the bonus and earn 20% by next November

So simple!

And I imagine if there were a reliable way to earn 20% in a year even regular Joes would be taking advantage.

Ok, I'm not getting something here, how does incorporating a corporation at age 25 reduce your taxes if you're still a salaried worker in another company for example?

It doesn't. Incorporation only helps if you have a flexible work arrangement and can shift income from salary into consulting fees or other payments to your Corp.

> So you can have someone who earns a $100,000 salary and gets a $500,000 bonus on December 31st. The bonus goes into the corporation and has a full year until November 30th before the tax is due.

How do you put "the bonus into the corporation"?