The IRS requires S-corporation owner-employees to pay themselves a reasonable salary — one comparable to what you would pay someone else to do the same job — before taking distributions. This matters because S-corp distributions are generally not subject to payroll taxes. Properly setting shareholder compensation is an important planning consideration. A salary that is too low may invite IRS scrutiny, while a higher salary can reduce the tax advantages associated with distributions. A wealth advisor coordinating with your CPA can help you find the right balance and document your reasoning.
We exist so you don’t have to worry about money. For more than 40 years, we’ve taken the sophisticated, time-tested approach that many ultra-high net worth individuals use to help manage their financial lives and made it accessible to more families.
