Reasonable Compensation

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Things Tax Preparers Say: “S-Corp Reasonable Comp is 25% of Your Gross Income”

By | February 21st, 2017|Categories: Small Business Tax and Accounting|Tags: , |

S-corporation reasonable compensation is one of the most misunderstood concepts in tax law. And that's saying something, considering how mind-numbing U.S. tax laws are.

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If You’re a Sole Proprietor, Think Hard Before Forming an S-Corp

By | May 27th, 2016|Categories: Small Business Tax and Accounting|Tags: , , |

I’m encountering more and more sole proprietors who want to form S-corps so they can save on taxes. It’s a good strategy -- if you know what you’re getting into. The problem I encounter with these clients is: almost all of them engage in mystical thinking about the wonders of S-corps.

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S-Corporation Compensation Revisted

By | August 20th, 2014|Categories: Small Businesses Taxes|Tags: , |

Further discussion of S-corporation compensation considerations.

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Things Tax Preparers Say: S-Corporation Compensation

By | May 14th, 2014|Categories: Small Businesses Taxes|Tags: , |

In the tax world, the topic of S-corporations and the salary that needs drawn by the owner(s) of the S-corp is like the wild west. S-corps can be great for self-employed people to save on self-employment taxes. But too many business owners -- and their accountants -- treat S-corps like a magic wand that can just [...]

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