If you're an S Corp owner (or considering becoming one), you've probably heard that paying yourself a "reasonable compensation" is a must. But you might be unsure about how to set an S Corp salary for yourself so that it's "reasonable."
In this video, we'll cover the key topics you need to understand when setting an S Corp salary, including the difference between salary and distributions, what counts as reasonable compensation, factors to consider when setting an S Corp salary, and why you shouldn't use the 60/40 rule. This comprehensive guide will help you make informed decisions when setting salaries for your S Corp.
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RESOURCES:
Tax and accounting help for your selfemployed business: content.collective.com/getstarted
➡ What is Reasonable Compensation? (Article): https://www.collective.com/blog/money...
➡ How to Run Payroll for an S Corp (Article): https://www.collective.com/blog/money...
➡ Should You Start an LLC or S Corp? (Video): • Should I Start an LLC or S Corp? Comp...
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KEY MOMENTS:
00:00 Introduction
00:29 S Corp Salary Requirements
00:43 Salary vs Distributions
01:23 What is Reasonable Salary?
01:45 Considerations when Setting Reasonable Salary
01:59 Adjusting your Salary
02:24 Avoiding the 60/40 Rule
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