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Your 6-Step Checklist for Simplified SMB Tax Planning Read More »
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 articles and videos gloss over the most important input of this decision – your reasonable salary or reasonable compensation. This figure, along with your total …
Imagine this: You are a specialized heart surgeon who has spent the better part of 40 years training and perfecting your craft. This morning, you have a tricky procedure scheduled with a patient who is in desperate need of medical intervention. You go to greet the patient, and start explaining the procedure and what they …
The Risks of Letting your Clients Set Reasonable Compensation: Cautionary Tales Read More »
This is a question we get a lot at the beginning of the year: “I just took on a new S Corp client and they didn’t take any Reasonable Compensation last year. What do I do?!” First things first: Reasonable Compensation only applies if the owner takes a distribution. If the owner did not take …
Help! My New Client Didn’t Take Reasonable Compensation Last Year Read More »
With the last month of the year here, it’s time to reconcile Reasonable Compensation for your S Corp clients. If you are not familiar with the process of reconciling your S Corp owners’ Reasonable Compensation, you are not alone. On the other hand, it is typically a simple process, but can be a bit of …
Simple Guide To Reconcile S Corp Reasonable Compensation Read More »
When my office phone rings at 5:30 on a Friday afternoon, you know it’s probably bad. This particular call was no exception. On the other end of the line was Bob, a CPA I had known for years. “Counselor,” he started, “I have a real problem.” “Okay, Bob, what’s the problem?” “The IRS audited a …
Reasonable Compensation Horror Stories: The Tax Man Cometh Read More »
Having a Reasonable Compensation figure that is “reasonable” isn’t enough anymore. With the IRS turning up the heat on Reasonable Compensation compliance [See IRS TECH TARGETS S CORP OFFICER COMPENSATION], having that figure backed up by a credible source and documented is now critical in order to defend an IRS challenge.
The Inflation Reduction Act of 2022 (IRA22) was signed into law on August 16, 2022. The goal of the package is to raise $737 billion in revenue over the next decade, with $127 billion of that revenue coming from increased IRS enforcement. While it will take time before we understand the full implications of the …
Unpacking the Increased IRS Enforcement in IRA22 for S Corps Read More »
By Paul S. Hamann & Jack Salewski, CPA, CGMA The IRS is deploying technology and big data to combat compensation under-reporting. What does this likely mean for you and your S Corps? That Reasonable Compensation challenges will likely occur outside the traditional exam process. A challenge may come from the ongoing Employment Tax Program or …
By Michael Gregory, ASA, CVA, NSA, MBA, Qualified Mediator with the Minnesota Supreme Court Our guest contributor this month is Michael Gregory. Former IRS Territory Manager and key architect of the IRS Job Aid on Reasonable Compensation shares his wisdom on how the Job Aid has stood the test of time. IRS valuers identified reasonable …
Is the IRS Job Aid on Reasonable Compensation Still Relevant? Read More »
