As your tax and financial advisors, DRDA wants to make you aware of your responsibility to accurately determine and document your Reasonable Compensation for the services you provide to your business. Reasonable Compensation is the salary or wages that you, a shareholder-employee of an S Corp, or LLC, pay yourself for the work you perform for your company.
The IRS requires that all shareholders of S Corps who perform services for their company pay themselves Reasonable Compensation, and it should be paid prior to taking any distributions.
DRDA is here to assist you with this issue and have tools available that can help you accurately determine your Reasonable Compensation figure.
Please contact Peter Vollers at 281-954-6021, or Rene Lewis at 281-954-6007 if you would like to discuss this issue further, or to order a Reasonable Compensation Report.