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Personal salary vs Dividends?

Discussion in 'Starting a Lawn Care Business' started by JFGauvreau, Feb 1, 2010.

  1. JFGauvreau

    JFGauvreau LawnSite Bronze Member
    Messages: 1,298

    Well can anyone explain me the different between a personal salary and a dividends?

    My accountant told me it was better for me at the end of the year to declare it in dividends because I wouldn't get tax as much then a personal income.

    So lets say, just a random guess, I will make 50k (gross) this first year, how does the dividends work, like you don't get any personal income right? you have to invest it back to the company or something?
  2. JB1

    JB1 LawnSite Fanatic
    Messages: 5,904

    you really should talk to your accountant some more. But my take on it is say your paying yourself a salary of $50,000.00 per year, cut that back to 30k a year, pay your self 20k in a dividend and you will save paying social security tax on 20k. just my take. But talk to a CPA
  3. jon green planet

    jon green planet LawnSite Member
    Messages: 35

    a CPA can help you for a reasonable amount of money but can't compare with all the money you are gonna save..

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