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Increasing tax rate to qualify for loan

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I'm currently drawing a small W2 salary from a company which I am part owner of. In two years time, however, I will need to qualify for a personal loan. Would it behoove me to draw a larger salary and thus increase my tax rate so that it looks like I am earning more? I hate the idea of giving money away to the government via tax but if that's what it takes to meet Debt-to-income ratio lending requirements so be it. 

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What happens to the rest of the profit? Isn't it distributed to you as a dividend or something? Wouldn't that count towards income just the same?

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scripta said:   What happens to the rest of the profit? Isn't it distributed to you as a dividend or something? Wouldn't that count towards income just the same?
  It isn't distributed. It's retained by the company. 

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Then distribute the money retained by the company. The tax treatment will be depend on if you are a C Corp or an S Corp (or an LLC w/ an S Corp election)... but either way, you won't pay payroll taxes on the distribution.

Now you've got the higher income as shown on your tax return (via your W-2 and K-1), but while saving some taxes, as compared to just taking a higher salary.

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slappycakes said:   Then distribute the money retained by the company. The tax treatment will be depend on if you are a C Corp or an S Corp (or an LLC w/ an S Corp election)... but either way, you won't pay payroll taxes on the distribution.

Now you've got the higher income as shown on your tax return (via your W-2 and K-1), but while saving some taxes, as compared to just taking a higher salary.

  If it's an S corp the earnings are distributed even if they aren't

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Can you pay yourself more and then save more in a SEP-IRA to reduce your taxable income?  Wouldn't this also increase your SS earnings so you qualify for higher SS benefits down the road?

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