Skip to content
Facebook Twitter Instagram
Tax Services

Tax Services Solve Tax Problems ltd

  • For ClientsExpand
    • Buy Our Services
    • Access/ Submit Files Securely
    • Estimates
    • Make an Appointment
    • Make a Payment
    • Financial Calculators
    • Client Information Security
  • CategoriesExpand
    • Presentation
    • AssetsExpand
      • Inventory
    • Liabilities
    • Revenue
    • Financial StatementsExpand
      • Analyzing Risks And Problems
  • BookkeepingExpand
    • Bookkeeping and Payroll Price Estimation
    • Bookkeeping Services
    • Financial Calculators
    • Bookkeeping Software
    • Business Plan
  • Payroll
  • TaxExpand
    • Filing Income Tax Cost Estimation
    • Tax Services
    • Tax Resolutions
    • Business Tax Forms
    • Tax Deductions for a BusinessExpand
      • Meals and Entertainment Deduction Explained
    • Cryptocurrency Profit and Tax to the IRS
    • Like-Kind Exchanges
    • Partnership Income Calculator
    • Foreigners Investing in US Real Estate.
    • Sales Tax or Retail Sales Tax
    • Outsourcing CPAs And Tax Attorneys
    • Tax Calendar
    • Tax Preparation
    • Estimated Federal Taxes
    • Foreigners Investing In Real Estate In The USExpand
      • Tax Implications of Outsourcing
  • CalculatorsExpand
    • Net Income Calculator
    • Net Income (with Inventory) Calculator
    • Partnership Income Calculator
    • S-Corporation (With Inventory) Income Calculator
    • C-Corp (with Inventory) Income Tax and Dividend Income Calculator
    • Financial Planning
    • Tax Saving Strategy
    • Financial Planning via Retirement Accounts
    • Financial Calculators
    • Taxable Transactions CalculatorsExpand
      • Gain Through Sale
      • Like-Kind Exchange
      • Condemnation Gain Calculator
  • Order ServicesExpand
    • Buy Our Services
    • Bookkeeping and Payroll Price Estimation
    • Filing Income Tax Return Price Estimation
    • Resolve Owed Taxes
    • Set Up an Accounting Software
  • ContactExpand
    • Contact Us
    • Our Experience
    • Access/ Submit Files Securely
  • Accessibility
  • About Us
  • Our Experience
  • Check Our Background
  • en English
    af Afrikaanssq Shqipam አማርኛar العربيةhy Հայերենaz Azərbaycan dilieu Euskarabe Беларуская моваbn বাংলাbs Bosanskibg Българскиca Catalàceb Cebuanony Chichewazh-CN 简体中文zh-TW 繁體中文co Corsuhr Hrvatskics Čeština‎da Dansknl Nederlandsen Englisheo Esperantoet Eestitl Filipinofi Suomifr Françaisfy Fryskgl Galegoka ქართულიde Deutschel Ελληνικάgu ગુજરાતીht Kreyol ayisyenha Harshen Hausahaw Ōlelo Hawaiʻiiw עִבְרִיתhi हिन्दीhmn Hmonghu Magyaris Íslenskaig Igboid Bahasa Indonesiaga Gaeligeit Italianoja 日本語jw Basa Jawakn ಕನ್ನಡkk Қазақ тіліkm ភាសាខ្មែរko 한국어ku كوردی‎ky Кыргызчаlo ພາສາລາວla Latinlv Latviešu valodalt Lietuvių kalbalb Lëtzebuergeschmk Македонски јазикmg Malagasyms Bahasa Melayuml മലയാളംmt Maltesemi Te Reo Māorimr मराठीmn Монголmy ဗမာစာne नेपालीno Norsk bokmålps پښتوfa فارسیpl Polskipt Portuguêspa ਪੰਜਾਬੀro Românăru Русскийsm Samoangd Gàidhligsr Српски језикst Sesothosn Shonasd سنڌيsi සිංහලsk Slovenčinasl Slovenščinaso Afsoomaalies Españolsu Basa Sundasw Kiswahilisv Svenskatg Тоҷикӣta தமிழ்te తెలుగుth ไทยtr Türkçeuk Українськаur اردوuz O‘zbekchavi Tiếng Việtcy Cymraegxh isiXhosayi יידישyo Yorùbázu Zulu
Facebook Twitter Instagram YouTube Facebook Group
Tax Services
Tax Services Solve Tax Problems ltd
(888) 786-9829

S-Corporation (With Inventory) Income Calculator

Use this calculator to estimate if S-Corporation tax election is beneficial to you. 

Tax Saving Strategy
 
S-Corp Reasonable Compensation ins and outs
 
There is a lot of misconception on how to pay yourself that Reasonable Compensation when your company is an S-Corp. There is a big struggle to navigate between how much taxes you want to pay and how much you should pay. The struggle to prove to the IRS that the compensation you are paying yourself is reasonable is even bigger.  
 
What is at stake? Well, a lot, actually. First of all, if the IRS determines that your reasonable compensation is low or non-existent, they may reclassify your distributions as reasonable compensation. And then what? And then, you are stuck with the bill for all back payroll taxes, penalties, and interest. If you don’t know what back payroll taxes are it is because those people who had to deal with them, head heart attack and died, and didn’t have time to share what it is. Ok, that’s a joke. Almost a joke.
 
Did you know that the unpaid payroll taxes penalty alone can destroy your financial state pretty fast? 
The 100% penalty can be assessed against a responsible person or several responsible persons.
 
Back payroll taxes are one of the most serious tax problems a business owner can encounter. 
Payroll taxes you owe will not get legally written off (“discharged”) even if you file bankruptcy. 
 
To help you establish how much your reasonable compensation should be, you may want to take these things into account:
 
Source: https://www.irs.gov/pub/irs-utl/Reasonable%20Compensation%20Job%20Aid%20for%20IRS%20Valuation%20Professionals.pdf 
  • • the employee’s qualifications
  • • the nature, extent, and scope of the employee’s duties; 
  • • the employee’s background and experience;
  • • the employee’s knowledge of the business; 
  • • the size and complexity of the business;
  • • the time devoted by the employee to the business; 
  • • the economic conditions generally and locally; 
  • • the character and amount of responsibility of the employee; 
  • • whether or not the compensation is pre-determined based on activities to be performed or not determined until the end of the tax year; 
  • • amounts paid to the employee in prior years; 
  • • the salary policy of the taxpayer as to all employees; and
  • • the amounts paid by similar size businesses in the same area to equally qualified employees for similar services
Have you bought a notebook to record all this in your S-Corp minutes? I think you should.
Your S-Corp minutes regarding the reasonable compensation should be verifiable, documented, and defensible.
 
Did you know that job titles claimed for the reasonable compensation should be relevant to jobs performed?
 
Once you put the “CEO” when you sign your tax return- this is your title and your position in your company. 
 
If you have already signed your tax returns with “CEO” as your position, then, the IRS would be researching how much a CEO in your area, in your position earns on average (in case of an audit). 
 
Did you know that, In some cases, even if a company shows a loss for the year, they may still owe reasonable compensation to their shareholders-employees?

Sole-Proprietor Calculator
Sole-Proprietor (With Inventory) Calculator
Partnership (With Inventory) Calculator
S-Corporation (With Inventory) Calculator
C-Corp (With Inventory) Calculator

London Loughman S-Corp Reasonable Compensation
Search

Recent Tweets

Tweets by taxbookspayroll

Search

Recent Posts

  • Sale of Partnership Interest
  • Filing the K-2 and K-3 with 1065/1120-S
  • What Affects OIC
  • Recent Tax Related Charges and Tax Crimes
  • Taxability of Social Security Benefits/ Charitable Contribution Deductions

Categories

  • About Us
  • Assets
  • Bookkeeping
  • Business
  • C-Corp
  • Economy
  • Expenses
  • Financial Statements
  • Foreign Taxation
  • Income
  • Liabilities
  • Owner Equity
  • Partnership
  • Payroll
  • Revenue
  • S-Corp
  • Tax
  • Tax Planning
  • Tax Problems?
  • Uncategorized
  • Cookie policy (UK)
  • Cookie Policy (US)
  • Disclosure
  • Privacy and Policy
  • How To Use This Site
  • Access/ Submit Files Securely
  • About Us
  • Contact
  • Accessibility
  • QBO Advisor
  • 5-star Reviews on Google
  • 5-star Reviews On Freelancer
  • Chartered Economist
  • Insurance
  • IRS Resolutions
  • Quora Profile
  • Medium Profile
  • Accessibility
Facebook Twitter Instagram YouTube Facebook Group Vimeo
  • Cookie policy (UK)
  • Cookie Policy (US)
  • Disclosure
  • Privacy and Policy
  • How To Use This Site
  • Access/ Submit Files Securely
  • About Us
  • Contact
  • Accessibility

© 2023 Tax Services Solve Tax Problems ltd - WordPress Theme by Kadence WP

Popup Button
Manage Cookie Consent
We use cookies to optimize our website and our service. If you don't wish to be tracked, please, use an anonymous browser.
Functional cookies Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}
Call Now Button
  • For Clients
    • Buy Our Services
    • Access/ Submit Files Securely
    • Estimates
    • Make an Appointment
    • Make a Payment
    • Financial Calculators
    • Client Information Security
  • Categories
    • Presentation
    • Assets
      • Inventory
    • Liabilities
    • Revenue
    • Financial Statements
      • Analyzing Risks And Problems
  • Bookkeeping
    • Bookkeeping and Payroll Price Estimation
    • Bookkeeping Services
    • Financial Calculators
    • Bookkeeping Software
    • Business Plan
  • Payroll
  • Tax
    • Filing Income Tax Cost Estimation
    • Tax Services
    • Tax Resolutions
    • Business Tax Forms
    • Tax Deductions for a Business
      • Meals and Entertainment Deduction Explained
    • Cryptocurrency Profit and Tax to the IRS
    • Like-Kind Exchanges
    • Partnership Income Calculator
    • Foreigners Investing in US Real Estate.
    • Sales Tax or Retail Sales Tax
    • Outsourcing CPAs And Tax Attorneys
    • Tax Calendar
    • Tax Preparation
    • Estimated Federal Taxes
    • Foreigners Investing In Real Estate In The US
      • Tax Implications of Outsourcing
  • Calculators
    • Net Income Calculator
    • Net Income (with Inventory) Calculator
    • Partnership Income Calculator
    • S-Corporation (With Inventory) Income Calculator
    • C-Corp (with Inventory) Income Tax and Dividend Income Calculator
    • Financial Planning
    • Tax Saving Strategy
    • Financial Planning via Retirement Accounts
    • Financial Calculators
    • Taxable Transactions Calculators
      • Gain Through Sale
      • Like-Kind Exchange
      • Condemnation Gain Calculator
  • Order Services
    • Buy Our Services
    • Bookkeeping and Payroll Price Estimation
    • Filing Income Tax Return Price Estimation
    • Resolve Owed Taxes
    • Set Up an Accounting Software
  • Contact
    • Contact Us
    • Our Experience
    • Access/ Submit Files Securely
  • Accessibility
  • About Us
  • Our Experience
  • Check Our Background
Skip to content
Search
Open toolbar Accessibility Tools

Accessibility Tools

  • Increase TextIncrease Text
  • Decrease TextDecrease Text
  • GrayscaleGrayscale
  • High ContrastHigh Contrast
  • Negative ContrastNegative Contrast
  • Light BackgroundLight Background
  • Links UnderlineLinks Underline
  • Readable FontReadable Font
  • Reset Reset