Reasonable compensation should not be a once-and-done number or a percentage copied from another client. It is an annual facts-and-circumstances analysis tied to the shareholder-employee’s role, business economics, comparable data, and the rest of the tax plan.
Who should attend
Practitioners serving S corporations and shareholder-employees.
Learning objectives
- Identify the facts that materially affect a compensation conclusion.
- Use comparable data without allowing a database to make the professional decision.
- Model compensation sensitivity against payroll tax, §199A, retirement, and other effects.
- Build an annual documentation and review process.
Two-hour agenda
- Authority and practitioner exposure
- Fact development and role analysis
- Comparable compensation evidence
- Sensitivity and Net Economic Benefit
- Documentation, implementation, and annual review