$$ out of S Corp

[S T]

S Corp

Administrative and Mgmt Fees standard in this industry on this S Corp would be the 80% shareholder $ 125,000 - $ 175,000 and the Administrative Assistant 20% shareholder, at $ 80,000 to $100,000.

Those are the wages they would receive if they went to work for another employer, and then they would probably receive more with bonuses, commissions, fringe benefits. Everyone has done their homework!

So this S Corp that we are talking about is paying reasonable wages. They have met the IRS requirement.

I certainly am not going to advise them to reduce their salaries to save on payroll taxes! Then I probably would be sued and asked for all of the penalties and interest on top of that for having them only take out $50,000 in wages. That is not a reasonable wage! At least not for this S Corp.

Sandy

[Gretel]

Sandy, I don't think you have to defend anything. Everyone, who just knows you a little bit, knows that you are very thorough and concerned about details and usually have your ducks in a row. Have a good day.

[BHoffman]

Amen. I am tired of SCorp officers taking no salary or insufficient salary to avoid the relatively small issue of payroll taxes. Compared to the problems they can have down the road for noncompliance, the payroll tax savings just aren't worth it. I use salary.com to find what would be considered reasonable.

I'm having a problem on the other end right now. SCorp officers taking 3 times as much salary as would considered "reasonable" for their position. Does that set a precedent for the future? What if they want to lower their salary to the reasonable level?