How Gingrich’s S Corporation Lowered His Taxes

Newt Gingrich’s recently released 2010 tax returns revealed the presidential candidates’ tax strategy involving an S corporation. Gingrich reported $2,478,539 of his earnings from his speaking and consulting work as profits from his S corporation. This tax strategy allowed Gingrich to exempt that portion of his income from Medicare tax—a tax bill that would have amounted to an estimated $54,527 to $59,485.

Gingrich is not the first person to utilize this tax saving technique. In the mid-1990s, John Edwards’ S corporation saved him over $700,000 in Medicare taxes.

For more on S corporations, see Paul Sullivan, The Advantages and Risks of Gingrich’s Tax Strategy, The New York Times, Feb. 3, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.