‼️ S-Corp Reasonable Compensation ‼️ S-Corp owners wearing the “shareholder-employee” hat have one big job they can’t ignore: paying themselves reasonable compensation. 💼🧾 If you’re actively working in your business, the IRS expects you to take a W-2 wage that reflects the value of the services you provide—not a token amount and not zero. 👀 And here’s the part many owners miss: 🎯 You need a written determination. 📝 🎯 Document how you arrived at your salary, including: ✅ Industry standards 📊 ✅ Duties and responsibilities 🧠 ✅ Time spent working ⏱️ ✅ Comparable positions 💼 ✅ Business profitability 📈 This memo is your first line of defense if the IRS ever asks why your wage is “reasonable.” Without it, you’re left guessing—and that won’t hold up in an audit. ⚠️ If you’re an S-Corp owner, protect yourself. Document your compensation analysis and revisit it annually. ✔️
