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Without a safe harbor or definitive guidance on what constitutes a reasonable salary, S corporations have resorted to various rules of thumb, such as a ratio of salary to distributions, net business income or gross receipts. Self-employed persons will pay a contribution to the Quebec parental insurance plan based on net business income. 5 percent tax on unearned income, a 12 percent tax on the net business income of self-employed people and an additional one percent tax on all income of more than $200,000. |
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