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 complete a Reasonable Compensation analysis each year using one of the three IRS-approved approaches. Keep a record of all supporting documentation for your figure each …
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