Industry Insights
Articles, eBooks, White Papers, Infographics and more to keep you updated on the world of reasonable compensation.
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COVID Distribution Strategy for S Corps – Avoid a 15% Reasonable Compensation Penalty
By Paul S. Hamann & Jack Salewski, CPA, CGMA COVID has taught us a lot about protecting ourselves, and not just about wearing a mask. We’ve learned a lesson on…
November 1, 2020
Should you adjust Reasonable Compensation in the age of COVID?
By Paul S. Hamann & Jack Salewski, CPA, CGMA COVID is affecting everything in 2020, and that includes Reasonable Compensation. Business owners may be putting in more hours, or less,…
October 1, 2020
The Benefits of Establishing Reasonable Compensation
By Jack Salewski, CPA, CGMA & Paul S. Hamann We find it perplexing how often S Corp. owners - who invest in their business with an eye on the future…
September 1, 2020
Practice Development + Reasonable Compensation
By Paul S. Hamann & Jack Salewski, CPA, CGMA As we approach planning season and you take stock of your practice, think about your clients who are a pleasure to work…
August 1, 2020
What is Reasonable Compensation?
By Paul S. Hamann & Jack Salewski, CPA, CGMA Back to basics. “What is Reasonable Compensation?” (Or, what is meant by Normalizing Owner’s Comp.?) You get it. CPAs, EA’s, tax and…
July 1, 2020
Anatomy of an IRS Reasonable Compensation Challenge
By Jack Salewski, CPA, CGMA & Michael E. Breslin CPA, MST, JD What does an IRS reasonable compensation challenge look like from A-Z? Following is an analysis of a recent…
June 1, 2020
Reasonable Compensation & the PPP
By Beanna J. Whitlock, EA CSA Executive Director ncpeFellowship, an internet organization for tax professionals who are serious about the business of tax - https://ncpefellowship.com/ What a relief it was…
May 1, 2020
Reasonable Compensation & the Single Shareholder S Corp
By Jack Salewski, CPA, CGMA & Paul S. Hamann “If there is only one shareholder and no other employees, should all distributions be taken out as Reasonable Compensation?” This is…
April 1, 2020
Ego and Reasonable Compensation
There are times when every small business owner’s ego can be an asset, although when it comes to Reasonable Compensation and S Corps, having a big ego could cost your…
March 1, 2020
Planning S Corp Distributions to keep the IRS off your Back
“I’ll just take distributions, then pay myself reasonable compensation at the end of the year.” Quack, quack. “Holding a meeting is a hassle. I’ll just write a check for my distribution…
February 1, 2020
How do you know if Compensation is Unreasonable?
So how do you know if your S Corp client’s Compensation is Unreasonable? The most efficient way is to stress test it (download stress test here). Outside of stress testing…
January 1, 2020
Step by Step Guide: How to Calculate Reasonable Compensation
The old adage “Simple isn’t always easy” perfectly sums up the IRS and Court guidelines for determining Reasonable Compensation. At first blush the IRS and court guidelines seem simple enough –…
December 1, 2019
10 Reasonable Comp Points to Discuss with Your Clients Now!
Without an accurate Reasonable Compensation figure, tax planning is just a guess. 1. Educate. Send an issue letter so your clients are thinking about Reasonable Compensation before you meet. Most…
November 1, 2019
What if Reasonable Compensation is more than an S Corp Owner can afford?
By Paul S. Hamann & Jack Salewski, CPA, CGMA This is by far the number one question we receive, and the answer is both simple and complex. Why? Because the…
October 1, 2019
Free Tools to Educate your Clients
We have asked over 20,000 accounting professionals “What is your biggest concern or aggravation when advising your clients on Reasonable Compensation?” The number one response by far: Educating my clients…
September 1, 2019
Did the IRS Really Lose? Lessons from the Davis Case
The IRS usually wins when it challenges an S Corp.’s Reasonable Compensation in court. Over the years there have been in the neighborhood of 25 to 30 such cases. The…
August 1, 2019