I worked as a consultent for a number of years, just doing regular old programming gigs. While I was doing this I did my taxes as a sole-proprietorship. I had to pay marginal tax and self-employment tax. Which added up to about 30% of my income (15% from self-employment and %15 from marginal)
I just found out that if you are an S-Corp, and you are an employee (the sole employee) of an S-Corp any salaries or bonuses that you give yourself are not subject to self-employment tax.
Does that mean that I gave 15% of my income to Uncle Sam that I didn't really need to?
Incorporation Tax Sole Proprietorship
Nope. Your S-Corp can pay you wages or salary, but if it does, like all employers, it will have to withhold FICA and Medicare. In normal years, this will amount to 7.65%. Also, as an employer, you have to match these amounts. That totals 15.3%. That number probably looks familiar.
You could maybe not pay yourself a salary at all and just let the profit pass through to be taxed on your personal return as S-Corp profit. This is not subject to self-employment tax, but the IRS has been successful reclassifying S-Corp profits as wages where the profit is due mainly to the efforts of an individual.
So, more concisely, no, you did not pay that tax unnecessarily.