S-Corp, pay self rent versus dividend?

As a 1-person S-Corp owner, how does it benefit me to pay myself rent versus dividend?

As an S-Corp owner, I pay myself a certain market-rate salary, and use the remainder each year to cover expenses and dividend. Assuming that the salary is fixed (much of which goes into a 401k solo), it seems I have some options as to how much to pay myself for the space my business uses in my house, and how much to channel into dividends. My question is, since dividends are taxed at a lower rate than income, and I think the rent is taxed as regular income, which we have enough of already, why does it benefit me to pay more than a minimal amount as rent. I was advised to pay myself ~$500/mo rent by an accountant who helped me with my books for the first year, but is sadly no longer with us, and so I am afraid I do not understand the details.
If it matters, I generally avoid accounting practices which will draw the attention of the IRS.

Cheers,
Connie O'Dell
CO Consulting, Inc.
Boulder, CO

As a 1-person S-Corp owner, how does it benefit me to pay myself rent versus dividend? | LinkedIn Answers | LinkedIn