Reasonable Compensation for an S Corp Shareholder
A Subchapter S corporation (S corp) is a pass-through entity where the company’s income and losses flow through to shareholders where it is taxed as personal income. However, when a shareholder also works for the company, the IRS usually requires the payment of reasonable compensation that is subject to payroll taxes. A shareholder who owns […]
Will Filing as an S Corporation Reduce the Tax Bill of a Business Owner?
My business clients often ask me whether they would see a tax benefit if they converted their business to an S corporation. Unfortunately, there is no simple answer to the question because there are numerous pros and cons to operating as an S corporation. It all comes down to whether the advantages outweigh the drawbacks […]
