Resources
Guides, case law analysis, and tax planning strategies for S-corp reasonable compensation.
6 articles
The 9 IRS Factors for Reasonable Compensation, Explained
The IRS uses nine factors to evaluate S-corp officer compensation. Here's what each one means, how it's applied, and how to address it in your documentation.
What Happens When the IRS Challenges Your S-Corp Salary
If the IRS decides your S-corp salary is too low, they reclassify distributions as wages. Here's how audits work, what they cost, and how to prepare.
The S-Corp 60/40 Rule Is a Myth. Here's What the IRS Actually Looks At.
The 60/40 salary-to-distribution rule has no IRS basis. Tax Court has explicitly rejected arbitrary percentage formulas. Here's what to do instead.
Cost Approach vs. Market Approach: Picking the Right Method
The IRS recognizes multiple approaches for calculating reasonable compensation. Here's how the Cost and Market approaches work and when to use each one.
How the QBI Deduction Affects Your S-Corp Salary Decision
Section 199A's QBI deduction creates tension with S-corp reasonable compensation. Higher salary means less QBI, but too low triggers the IRS. Here's how to think about it.
Every S-corp needs a number they can stand behind.
Generate an IRS-defensible reasonable compensation report in about 15 minutes using BLS wage data.
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