Need help coming up with a reasonable S corporation salary?:

S corporations can save their owners enormous amounts of tax. How? By correctly setting salaries for shareholder-employees and thereby reducing payroll taxes. But the process is tricky.

Set the salary too low and you run the risk of an IRS examination. That's bad. Really bad. In an audit, a too-low salary means not only that you will be required to pay back the S corporation tax savings you thought you were getting, but it also means you'll be assessed severe penalties. Ouch.

Set the salary too high, however, and the situation is even worse. You may needlessly overpay your payroll taxes. And overpaying your payroll taxes could easily be a million-dollar mistake over the course of your business's life.

Double-ouch. To help you make better decisions about setting your S corporation salary, I've prepared a short, easy-to-understand 18pp document, "Strategies for Setting Low Salaries for S Corporation Shareholder-employees."

Written in plain, everyday language, this $37.95 document explains how to save thousands of dollars a year with your S corporation--but at the same time how you can do so ethically and responsibly and in a way that minimizes both the chance that your S corporation return will be examined and the chance your S corporation salary will be rejected by the Internal Revenue Service.

"Strategies for Setting Low S corporation Salaries for Shareholder-Employees" -- Table of Contents

I. Introduction

II. How Low S Corporation Salaries Save Payroll Taxes

III. When Low S Corporation Salaries Don't Save Money

A. Gotcha #1: Extra Fees and Out-of-pocket Expenses

B. Gotcha #2: State Income Taxes

C. Gotcha #3: Multiple Shareholder-employees

D. Summarizing what the "Gotchas" Mean in Practice

IV. How S Corporations Commonly Set Salaries

A. Average S Corporation Salaries

B. S Corporation Salaries Across Different Size Businesses

C. Treasury Inspector General Pronouncements

V. What the IRS and Courts Say On-the-record

VI. What the Internal Revenue Service Says Off-the-record

A. One-Man S Corporation Salaries

B. When There Are Other Employees and Capital Investments

C. Unofficial Minimum Salary Amounts

D. Salary-Distribution Breakdown Formulas

VII. What Knowledgeable Tax Practitioners Often Recommend

VIII. Five General Rules of Thumb for Setting S Corporation Salaries

IX. Applying the Rules in Practice

A. Example #1: The One-Person Service Business that Makes $80,000 Annually.

B. Example #2: The High-priced Professional that Makes $500,000 Annually.

C. Example #3: The Semi-inactive S Corporation Making $20,000 Annually.

D. Example #4: The Traditional Small Business With Employees and/or Assets

X. Conclusion

No-risk Money Back Guarantee

I personally guarantee you'll get more information and more useful information about setting up an S corporation in this $37.95 document than, you will receive in any one-hour meeting with a CPA or tax attorney where you would go over the same issues. Accordingly, if for any reason you feel you didn't get valuable, useful information in the "Strategies for Setting Low S Corporation Salaries for Shareholder-Employees" document, contact me at steve dot nelson at stephenlnelson dot com and request a refund within 30 days. Your payment will be completely refunded. No questions, no hassles, no delay.

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About the Author

The "Strategies for Setting Low S Corporation Salaries for Shareholder-Employees" document was written by Stephen L. Nelson, CPA. A CPA for twenty-five-plus years, Nelson holds an MBA in Finance from the University of Washington and an MS in Taxation from Golden Gate University. Nelson is the author of numerous best-selling books about accounting and finance, including Quicken for Dummies (which sold more than 1,000,000 copes) and QuickBooks for Dummies (which sold more than 500,000 copies). He's also taught llc and S corporation taxation in the graduate tax school at Golden Gate University.

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