Biz Help For You
Biz Help For You is a business education podcast designed to help small business owners and entrepreneurs navigate the rules, regulations, and best practices that keep their businesses compliant and profitable. Each episode delivers practical guidance on topics like business licenses, payroll, sales tax for online and brick-and-mortar sellers, 1099 processing, and other critical compliance tasks.
In addition to compliance insights, the show shares expert tips on marketing, website design, budgeting, understanding financial reports, and growing your business efficiently. Listeners will also learn how to build effective systems and processes, hire and manage teams, choose between desktop and cloud-based software, and create marketing strategies that drive results.
Whether you’re a new entrepreneur or an established business owner, Biz Help For You equips you with actionable strategies, expert advice, and insights to help your business run smoothly, stay compliant, and achieve sustainable growth.
Biz Help For You
Is Your S Corporation Salary Putting You at Risk?
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Many S corporation owners try to reduce payroll taxes by paying themselves a small salary and taking the rest as shareholder distributions. While this strategy may seem appealing, it can create significant IRS risks if your salary isn't considered reasonable compensation.
In this video, we discuss:
• What the IRS considers reasonable compensation for S corporation owners
• Why paying yourself too little can trigger payroll tax audits and penalties
• Common myths about S corporation salaries, including the 50/50 rule
• How the IRS determines whether your compensation is reasonable
• The different methods tax professionals use to calculate fair compensation
• Practical payroll compliance tips to help protect your business
If you're an S corporation owner, understanding reasonable compensation is essential to avoiding costly IRS penalties, interest, and payroll tax issues. This episode provides practical guidance to help you stay compliant while making informed payroll decisions.
Pay yourself correctly. Stay compliant. Protect your business.
⏱️ Timestamps:
00:00 – Are you paying yourself enough?
00:42 – Welcome to Biz Help for You
00:58 – Why reasonable compensation matters
01:20 – S corporation tax advantages explained
01:51 – IRS rules for shareholder employees
02:17 – What is reasonable compensation?
03:10 – Common S corporation salary myths
04:00 – Methods for determining reasonable compensation
05:04 – Increased IRS enforcement and audit risks
05:54 – Payroll compliance best practices
06:50 – How Affordable Bookkeeping and Payroll Services can help
07:24 – Key takeaways and closing remarks
Resources: https://affordablebookkeepingandpayroll.com/resource-opt-in
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