Reasonable Compensation (S Corp)

Reasonable Compensation

Do This Every Year!

Reasonable Compensation is the salary or wage that you, a shareholder-employee of an S Corp, must pay yourself for the work you perform for your company.

There has been a lot of information in the news regarding the IRS funding outlined in the recent IRA22 legislation. One of the key takeaways is clear - the IRS intends to audit S-corporations at a much higher rate in the near future, specifically focusing on reasonable compensation. The penalties for taking low, or no, reasonable compensation are steep for both you as the S-Corp owner.

A Reasonable Compensation analysis is an independent, unbiased report that establishes your Reasonable Compensation, using criteria outlined by the IRS and Courts, and provides a defensible position to an IRS challenge.
A Reasonable Compensation challenge can be costly.  Typically, taxes, penalty, and interest are more than double the original tax that would have been owed – plus costs for amending returns (all totaled, usually in the tens of thousands of dollars).

Read this brochure to learn more about Reasonable Compensation.


Protect yourself, Contact us TODAY to get your analysis report.
Share by: