Determining Reasonable Compensation

The concept of reasonable compensation has always been important in determining adequate compensation for the shareholder/employee of S corporations. The concept has taken on an additional importance with the passage of the new tax law effective January 1, 2018. We can help you determine a defensible calculation of reasonable compensation that can aid in the reduction of unnecessary payroll tax expense and be crucial to obtaining the full 20% tax deduction allowable under the new tax law.The correct calculation of reasonable compensation can also reduce your tax liability when unfiled individual returns have to be filed.