Setting a a Reasonable S Corporation Salary • Stephen L. Nelson CPA PLLC

Are you a CPA or attorney helping clients with their S corporations?

Or maybe an experienced S corporation shareholder who needs to be smarter (or safer) about the way you’ve set your salary?

We’ve published a popular downloadable e-book (price $50, just under 100 pages) about setting a low yet reasonable S corporation salary that may be useful to you.

Instantly Downloadable

Instantly downloadable, our “Setting Low Salaries for S Corporations” monograph should help you reasonably set salaries for shareholder-employees and thereby reduce payroll taxes safely.

Note: The S corporations monograph has been updated for the Section 199A final regulations.

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What’s Inside

Need more detailed information about what’s in the e-book?

Packed full of clear explanations with dozens of real-life examples, the Setting Low S Corporation Salaries e-book breaks down its subject matter into ten, easy to digest chapters:

Chapter 1 – How S Corporations Save Payroll Taxes. A quick review of how the savings work including a subtlety most S corporation owners don’t know.
Chapter 2 – Reviewing the Law. An explanation of the actual statute, regulation and revenue rulings that provide the loophole.
Chapter 3 – Common Subchapter S Salary Practices. IRS data about what S corporations actually pay their shareholder-employees.
Chapter 4 – Single Shareholder Situations. When and how a small sole proprietor can maybe make the S corporation gambit work.
Chapter 5 – The Sec. 199A Deduction Complication. A discussion of how the Sec. 199A deduction works for an S corporation and how to resolve conflicts between the two tax laws.
Chapter 6 – Avoiding Unreasonable Distributions. A sidebar about the importance of also thinking about shareholder distributions.
Chapter 7 – Developing Reasonable Compensation Amounts. An eight-step work plan for setting a reasonable S corporation salary for shareholder-employees.
Chapter 8 – Practitioner Case Studies. Practical real-life examples showing how to optimize shareholder-employee salaries in common situations.
Chapter 9 – Risky Practices and Danger Zones. Discussions of common, dangerous S corporation shareholder-employee compensation mistakes.
Chapter 10 – Winning the “Reasonable Compensation” Argument. A step-by-step plan for winning an IRS audit of S corporation compensation.
Appendix A – Revenue Ruling 59-221. The key primary source that opened the loophole.
Appendix B – Revenue Ruling 74-44. The revenue ruling that the IRS uses to blow up bad S corporation salaries.
Appendix C – Relevant Portions of H.R. 4213. The law that almost passed and which applies to single-shareholder, single-employee S corporations.
Appendix D – Example Client Letter. A boilerplate letter accountants and attorneys can use for their own client mailings.
Appendix E – Example Client Email. A boilerplate email.