As discussed often, the S Corporation requires the officer to have a reasonable salary (w2). The reasonable requires your salary to be: In line with the net profit or losses of the company - A start up company having losses might not have officer salary (neither owner distributions) You should perform a benchmark for your
You need to be extremely careful on how you get in business with. You might end up being liable for ghost income, funds stolen from your partners and many other issues. In the Maggard v. Commissioner, (TC Memo 2024-77), James Maggard co-founded an engineering consulting partnership, the initial co-partner left buying him out, and then,
Similar to the IRS focus on partnership that we shared in our last week post, the S Corporation is another higher scrutiny entity type for the IRS. Back in June 2024, the IRS Chief Counsel Margie Rollinson announced the creation of new Associate Office that would focus on partnerships, S Corporations, trusts and estates. She
