Correctly calculating reasonable compensation for S or C corporation officers is crucial to ensure compliance with IRS regulations and avoid potential penalties.​

The IRS closely monitors officer compensation to prevent underpayment of payroll taxes or misuse of corporate profits. Reasonable compensation reflects the fair market value of the services provided by the officer and helps distinguish between wages and distributions or dividends.

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Failing to properly determine and report this compensation can trigger audits, tax penalties, and interest charges. By establishing reasonable, well-documented compensation, businesses can reduce tax risks and maintain their financial integrity.

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Our firm has access to a team of data scientists that have incorporated over 86 million data points on wages and industry to develop reasonable compensation guidelines.

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Contact us today by filling out the form below to ensure your officer compensation is accurately calculated and compliant with tax laws.