The American Jobs and Tax Loopholes Act, currently in Congress, would subject to Self Employment Taxes (FICA, FUTA, SUTA) all distributions from S Corporations which are “personal service” corporations. This is HUGE. This is not good for the small business owner. If you thought your taxes were high now you’re going to be in for a surprise.
A personal service corporation is a corporation whose principal activity for tax year is the performance of personal services. Personal services include any activity performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health, law, and the performing arts. The services must be substantially performed by employee-owners.