Legal Question in Social Security Law in Pennsylvania

I have a privately held S Corp with one employee - Me. I will reach full retirement age of 66 on Jan 11 2010and have applied for Soc Sec benefits to begin Jan. 1 2010. My situation is that I have been paying myself a monthly salary of $2000 and taking the proceeds of the Corp at the end of the year as a K-1 payment. My Corp only grosses ~ $60,000/yr and the only real benefit I get from having it is to avoid paying Soc Sec tax on my total net earnings. eg. I only pay on my salary of $24,000 per year and have been doing this since I formed the Corp three years ago. My Corp license renewal is due Nov 27 and it will cost me $500. When I applied for my Soc Sec benefits there was a statement in there that if I was in a family held Corp I would have to pay tax on my net Corp earnings not my salary. If this is the case I see no benefit to continue the Corp and I would go back to a Self employed home business and avoid all the fun paperwork of a Corp. Please advise if this is the case on FICA tax for family held corporations.
Thanks
Allan

Asked on 11/11/09, 10:39 am

Randall Selagy F. Randall Selagy, P.C.

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Your question is a tax/accounting question more that a Social Security matter. Try re-posting under that section

Answered on 11/19/09, 10:10 am

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