Um, sorry guys. S corps have small tax advantages, but it has to do eith avoiding medicare/social security tax on your dividends not any lower income tax rates on the dividend income. The above posters are correct that the irs looks carefully to ensure your wage income is reasonable, but like I said the tax benefits of this are currently small. I am a partner in a s corp, and although I am not a cpa, I can tell you with great confidence that s corps are Pass-through tax entities. This means that unlike c corps and mutual fund companies dividends, the s corp dividends are reported to shareholders/owners on a k-1, which goes into a schedule E on your tax forms. This schedule e income is taxed at your marginal rate, ie 35% if you are in AMT phaseout hell range like myself.
The tax advantage you get on dividends is avoiding the 1.45% personal medicare tax rate, the 1.45% matching employer tax rate, and both the personal 6.2% (4.2% this year only) and employer 6.2% soc sec tax. Of course any reasonable anesthesioligist salary would be well over the $106,500 soc sec wage cap, so you only get a 2.9% tax break.
Now, there are many tax advantages to 1099 income and self employment (largely business expenses and being able to reach large employer solo 401k/sep ira employer contributions of $49,000ish without the pesky nondescrimination rules that can limit groups contributions), but these are specific to 1099 income, not s corps.
