Announcement

Collapse
No announcement yet.

Reasonable Compensation for S Corp

Collapse
X
Collapse
 
  • Page of 3
  • Filter
  • Time
  • Show
Clear All
new posts
Previous 1 2 3 template Next
    #31
    That's not what

    happened on the two audits we have had.

    The first one was a husband & wife seperated. Husband worked full time and took some salary. The wife had no involvement. IRS agents first said all distributions are wages and "we never lose". We said we will see about that. It turned out they allowed distributions for the husband equal to the wife when we pushed back.

    The second and more recent audit I spelled out earlier in this strand. We were allowed a return on business value, tangible and intangible.

    Comment

      #32
      Reasonable compensation is well...reasonable

      There was a post about salary.com and this site is a very good one to see where the salaries should lie. I never give a S/H a 1099 Misc...yes they will pay self employment taxes on it, but they ARE employees. No profits, no distributions, no salary...they will not be in business long unless they are using the losses as a shelter against other income imho that is.

      Why not just gross up the wages for SS & Medicare, issue them a W-2 and call it a day?

      Comment

      Previous 1 2 3 template Next

      Disclaimer

      Collapse

      This message board allows participants to freely exchange ideas and opinions on areas concerning taxes. The comments posted are the opinions of participants and not that of Tax Materials, Inc. We make no claim as to the accuracy of the information and will not be held liable for any damages caused by using such information. Tax Materials, Inc. reserves the right to delete or modify inappropriate postings.

      Working...
      X