Reasonable Compensation Do's and Don'ts with Case Studies 1 Credit
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S-corporation reasonable compensation is one of the most misunderstood concepts in tax law. And that’s saying something, considering how mind-numbing U.S. tax laws are. The law says the corporation must pay a “reasonable” salary to the owner if the owner provides services to the business.
Reasonable compensation stands as a critical and often audited facet of S-corporation taxation. It's an area that frequently draws the attention of the IRS due to its potential for abuse. Contrary to common misconceptions in the tax industry, adhering to simplistic formulas like "pay yourself 60% of the profit as a salary and 40% as a distribution" lacks a factual basis and doesn't align with IRS standards. The essence of reasonable compensation transcends fixed percentages tied to profit. Indeed, audits and court cases have occasionally resulted in compensation figures considerably lower than the aforementioned 60%.
This CE Tax Course addresses the nuances of reasonable compensation—what it truly entails, how to accurately calculate it, and the strategies for effectively defending it against IRS inquiries. Our journey is enriched by a thorough examination of relevant court cases, providing valuable insights into the criteria and considerations that both the IRS and the courts employ when evaluating the reasonableness of compensation decisions.
Join this CPE webinar it empowers you with the knowledge and insights essential for not only ensuring adherence to tax regulations but also strategically optimizing your tax advantages.
| License details | Credits | Status |
|---|---|---|
| Taxes for Certified Public Accountants (CPA-US) | 1 CPE | Approved |
| Federal tax-related matters for Enrolled Agents (EA) (Approval No. GEHNZ-T-01735-23-S) | 1 CE | Approved |
| Federal tax-related matters for Annual Filing Season Program (AFSP) (Approval No. GEHNZ-T-01735-23-S) | 1 CE | Approved |
| Federal tax-related matters for California Registered Tax Preparers (CRTP) (Approval No. 6273-CE-1383) | 1 CE | Approved |
| Taxes for Delaware Licensed Public Accountant (DE-LPA) | 1 CPE | Eligible |
| Federal tax-related matters for Oregon Registered Tax Preparers (ORTP) (Approval No. GEHNZ-T-01735-23-S) | 1 CE | Approved |
| Federal tax-related matters for LTC (Approval No. GEHNZ-T-01735-23-S) | 1 CE | Eligible |
| Taxes for Iowa Licensed Public Accountant (IA-LPA) | 1 CPE | Eligible |
| Federal tax-related matters for Maryland Tax Preparer (MRTP) (Approval No. GEHNZ-T-01735-23-S) | 1 CE | Approved |
| Taxes for Maine Licensed Public Accountant (ME-LPA) | 1 CPE | Eligible |
| License details | Credits | Status |
|---|---|---|
| Taxes for Certified Public Accountants (CPA-US) | 1 CPE | Approved |
| Federal tax-related matters for Enrolled Agents (EA) (Approval No. GEHNZ-T-01735-23-O) | 1 CE | Approved |
| Federal tax-related matters for Annual Filing Season Program (AFSP) (Approval No. GEHNZ-T-01735-23-O) | 1 CE | Approved |
| Federal tax-related matters for California Registered Tax Preparers (CRTP) (Approval No. 6273-CE-1383) | 1 CE | Approved |
| Taxes for Delaware Licensed Public Accountant (DE-LPA) | 1 CPE | Eligible |
| Federal tax-related matters for Oregon Registered Tax Preparers (ORTP) (Approval No. GEHNZ-T-01735-23-O) | 1 CE | Approved |
| Federal tax-related matters for LTC (Approval No. GEHNZ-T-01735-23-O) | 1 CE | Eligible |
| Taxes for Iowa Licensed Public Accountant (IA-LPA) | 1 CPE | Eligible |
| Federal tax-related matters for Maryland Tax Preparer (MRTP) (Approval No. GEHNZ-T-01735-23-O) | 1 CE | Approved |
| Taxes for Maine Licensed Public Accountant (ME-LPA) | 1 CPE | Eligible |
Credit
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Pre-requisites
Advance Preparation
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MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478
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Looking to fulfill your Enrolled Agent (EA) Continuing Education (CE) requirements? MY-CPE online Enrolled Agent CE courses are the best for you. Earn EA CE Credits while enhancing your domain knowledge and expertise in diverse tax regulations and practices. Our courses are designed to provide you with the latest updates and deep insights to keep you ahead in your field. With flexible scheduling and a user-friendly platform, MY-CPE offers you a greater convenient and interactive learning experience. Join MY-CPE today and take the next step in advancing your career as an Enrolled Agent.
Jason Dinesen is a seasoned tax professional, educator, and entrepreneur with a passion for simplifying complex tax concepts. He is a go-to expert in accounting, bookkeeping, tax preparation, business advisory and interpretations of tax laws and regulations.
Jason has trained over 200,000 accounting, tax, and HR professionals through his engaging presentations, webinars, and self-study courses. Sharing his knowledge in the classroom, teaches Individual Income Tax and Business Analytics at Simpson College, where he earned his degree in corporate communications.
He has delivered numerous webinars on topics like:
Who Jason really is
He is a Whiskey Lover mastering the art of whisky tasting, a football fan, a craft man holding Chainsaw and Pen by IRS. Born and raised in Iowa, Jason leads a vibrant life with his wife, two sons, five cats, and three dogs.
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We issue instant credit certificates, ensuring they are valid for presentation to governing bodies. Typically, we report IRS, CTEC, CFP, IDFP, IWI, VBOA Ethics credits within 7 days – the fastest in the industry.
HK
I really enjoyed this CPE. The presenter was engaging & I enjoyed the examples he gave. It was also provided in a manner in which you can be a layman (not just a tax expert) and still understand the concept. His powerpoint presentation also listed pertinent points so was a really good summary. One negative was that the 1st review question did not list a correct answer. Should have listed 3121 as an option, but listed 3131 instead.
DK
Your presentation highlighted the key considerations in the IRS law, dispelled some of the myths about reasonable compensation "rules of thumb," and introduced some relevant court cases supporting your presentation's key takeaways.
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