S corp salary and distrubtion

1.   salary vs. distribution

S corp income eventually will all go to you.   The trick is part of it will be in the form of salary, subject to income tax and FICA; and part of it as "distribution", and subject to only income tax but not FICA. 

All you are saving under S corp is part of the money as distribution doesn't go to FICA.  

There is no set rule of how "salary" and "distribution" is calcuated in your S corp annual income.  IRS only requires "reasonable salary", meaning you cann't count 100% of S corp income as distribution thus avoid FICA, so a "reasonable" portion of income must be in salary. 

Compare to LLC,  ALL income must be subject to income tax and FICA. 

2.  reitrement plan

Either LLC or S corp can set up (1) SIMPLE IRA, (2) SEP IRA, (3) solo 401K.   They allow employer contribution that further saves you tax.