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Validity : 20th Mar'25 to 30th Mar'25
Reasonable compensation (an S-corporation topic)
- Explain the concept of reasonable compensation
- Explain methods -- and myths -- relating to determining reasonable compensation
- Identify resources for determining reasonable compensation
- Understand court cases and IRS guidance relating to reasonable compensation.
Overview of the webinar
Ensuring that an S corporation pays reasonable compensation to a shareholder-employee in exchange for services provided by the shareholder-employee is important in protecting both from assessments of tax, penalties, and interest. S corporation shareholders must include in income their pro-rata share of the S corporation’s earnings for the year. A shareholder-employee is not subject to self-employment taxes on a deemed or actual distribution of S corporation income, and the corporation does not pay any employment-related taxes on the distribution (Sec. 1373; Rev. Rul. 59-221). Conversely, a shareholder-employee and the S corporation are subject to employment taxes on compensation payment for a shareholder-employee’s services. As a result, S corporations often try to disguise compensation payments for services as income distributions. Ultimately, the determination of whether payments to a shareholder represent compensation for services or constitute a distribution of profits is essentially a factual determination.
Who should attend?
- Accountants
- CPAs
- Tax Preparers
- Bookkeepers
- Enrolled Agents
- Office Managers
- Small Business Owners
- EA
- AFSP
- Tax professionals
Why should you attend?
S-corporation reasonable compensation is one of the most misunderstood concepts in tax law. And that’s saying something, considering how mind-numbing U.S. tax laws are. The law says the corporation must pay a “reasonable” salary to the owner if the owner provides services to the business. The definition of “reasonable” will vary depending on the type of business and the type of services provided by the owner.
Faculty - Mr.Jason Dinesen
Jason Dinesen (EA, LPA) is a tax nerd, entrepreneur, tax expert and a well-known presenter of continuing education courses.
Known for his sharp tax interpretations, he is one of the quickest to bring the analysis of the latest tax updates and IRS guidance to the professional community. Jason has coached over 200,000 accounting, tax, and HR professionals on various topics of accounting, individual taxation, corporate taxation, professional ethics and much more.
He has presented over dozens of webinars on Form 1099 (for 10 years on this subject!); marriage in the tax code; tax updates; the new Form W-4, payroll updates, filing status, tax credits, corporation and partnership taxation and other issues relating to the modern-day setting.
Jason always had a knack for speaking and news reporting. He is regularly featured as an anchor for Radio Iowa and Radio Minnesota, is a frequent Podcast Guest and hosts his own Podcast.