Reasonable Compensation Analysis
The most common tax error we see is S corporation owners paying themselves too much or even worse – not enough.
Business owners pay a painful amount of tax on their earnings. One of the only tax “loopholes” left is the ability to thoughtfully establish your employment tax base. Don’t leave money on the table for the IRS to keep
Is your owner compensation reasonable? The term “reasonable compensation” is an IRS hot button. They are auditing S corporations left and right to ensure proper employment taxes are being paid. There is extra security and reporting requirements that is applied only to S corporations. I personally believe this is one of the top reasons S corporations are audited.
To help strategize your business’s compliance with the IRS’s reasonable compensation requirements AB CPA will help you determine if you are:
paying yourself the proper amount reporting your compensation properly on your tax forms to minimize audit exposure treating your health insurance properly for tax purposes
Take control of your taxes by strategizing your employment taxes via a reasonable compensation analysis. In conjunction with a tax plan, a reasonable compensation analysis can also help you set your income tax withholding to help avoid any nasty tax surprises in April and maximize your cash flows today.
To learn more about the IRS is reasonable compensation requirements, visit the tools page for a link to the IRSs summary. Or, contact AB CPA to schedule a Reasonable Compensation Analysis on this topic to ensure your business is covered.
Taxes are more than just numbers in boxes. Your S Corp taxes should be a thoughtful and planned process AB CPA offers strategic, trustworthy tax advice.
AB CPA Tax Service is an S Corp tax return specialist. With nearly 15 years of experience preparing S Corp returns in San Diego, AB CPA Tax Service can ensure your tax return is the best it can be. Top quality tax advising makes sure that you don’t pay one dollar more than necessary in tax. Contact AB CPA today!