S Corporations Reasonable Compensation Requirement

Article Highlights: Payroll Taxes  Corporate Officers  Employees of a Corporation  Reasonable Salaries  Factors  Flow-Through Deductions  Wage Limitations  Unlike a C corporation, which itself pays the tax on its taxable income, an S corporation does not directly pay taxes on its income; instead, its income, losses, deductions, and credits flow through to its shareholders’ individual tax returns on a pro rata …