Reasonable Compensation Year End Check List


I am not a big fan of checklists or New Year’s resolutions, but – there’s always a but –that being said, they are helpful in an annoying sort of way.  So, in an attempt to use a checklist and New Year’s resolution for good I have put together a short but important to-do list for you and your clients, so you can move Reasonable Compensation from the Procrastination column to the Done column.

  1.  Send your clients an issue letter explaining Reasonable Compensation.  We have a great letter you can use to get started, just download it from*
  2. Follow up on the letter, rinse and repeat as necessary.  A large percentage of your clients will simply do nothing after receiving your issue letter – right?  This is a perfect opportunity to check in with your clients, “Hi Todd, Let’s get your Reasonable Compensation documented; it’s cheap insurance, and the IRS is cracking down in this area” (you get the idea…)
  3. If your client has no idea how to value the services they provide to their S Corp, use RCReports to assist them.
  4. Put the Reasonable Compensation figure in the context of your client’s business.  Don’t know what I’m talking about? – take our class on Reasonable Compensation.  If we don’t have any live events scheduled, watch a recently archived class here.
  5. Reward yourself – Buy yourself that “thingy” you really wanted and didn’t receive this holiday season, (you did remember to invoice for your services) and check Reasonable Compensation off your to-do list!

Ahh – a few things are as satisfying as crossing items off your to-do list AND keeping a New Year’s resolution at the same time.  Here’s wishing you and your clients a prosperous 2015, and should a Reasonable Compensation challenge your way come – RCReports will have your back.  Now get back to work, April 15th will be here before we know it…

*You will need to log in to your RCReports account to download the issue letter, you will find it under ‘Tools’ in the Help tab.

Your 6-Step Checklist for Simplified SMB Tax Planning

Now that tax season is officially over (any extensions you have to file aside), now is the perfect time to shift into tax planning mode for your SMB (small-to-medium business)…
Tax Planning May 25, 2023

Maximizing Tax Savings for Digital Content Creators: Understanding Reasonable Salary for LLCs and S Corps

If you’re a digital content creator, chances are you’ve seen something online about the potential tax savings of switching from an LLC to an S Corporation. However, most of these…
Best Practices May 3, 2023

What is Reasonable Compensation? A Primer for S-Corp Owners

Reasonable Compensation in a Nutshell   All S-Corp shareholder-employees must pay themselves a reasonable salary (i.e. Reasonable Compensation) via W-2 BEFORE any distributions are taken. It’s the law. You should…
Best Practices May 3, 2023

Start exploring RCReports today.

        Submit a Ticket

          Scroll to Top