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- Re: S corp compensation
S corp compensation
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Strongsilence-C
Level 10
a week ago
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Hooty Hoo
In ITA I have selected the S Corp compensation strategy and ITA lowered the 2025 compensation from 2024 by 30K. It didn't disclose the methodology for the new salary. I'd like to know more about its choice of salary.
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3 Comments 3
Strongsilence-C
Level 10
Thursday
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Update: Tech support does not know. There is a video on this topic, but it doesn't shed light on my question.
George4Tacks
Level 15
Thursday
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It is likely using one of many possible "how to compute reasonable compensation" formulae. Have you played with various modifications on your own to see what the effect is?
Answers are easy. Questions are hard!
Strongsilence-C
Level 10
Friday
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Thanks.
I haven't tried other compensation amounts yet. Agree that is likely a formula. If so, I think that is a no-no as compensation must have a purpose other than tax reasons.
The taxpayer is high wealth, a physician, deducts losses on ranching operations, lots of debt. He may be in a risk for audit. I suppose one of the paid research services would offer us a little more confidence.
