How Much of S-Corp Income is Labor Income and Hence Subject to Medicare Taxes?

Here are a couple of comments I posted at Taxprof: T.C. Summary Opinion 2013-62 (McAlary, http://www.ustaxcourt.gov/InOpHistoric/McAlary.SUM.WPD.pdf) is amazing. Professor Schwidetzky has it absolutely right. Suppose Dr. Roe earns high labor income some years, low in others. He becomes an S-corporation, with zero capital. That’s not supposed to change his tax situation, right? But in deciding […]