[jly]

You are technically correct, the problem being that the IRS does not define what a "reasonable wage" is.

However, the intention of the law is that true income is taxed as income and not as distributions. When one individual provides 100% of the services of a business, is not reinvesting profits or paying employees, and is the sole full-time worker, they should be treated as an employee and taxed accordingly. Many people abuse the vagueness of this but that doesn't mean the IRS will agree if you choose to pay your Uber earnings as distributions not subject to employment taxes.

You can read a summary of some of the established case law on this topic here: https://www.thetaxadviser.com/issues/2011/aug/nitti-aug2011....