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https://evergreensmallbusiness.com/irs-s-corporation-shareholder-salary-data/#:~:text=The%20S%20Corporation%20Salaries%20Number%20is%20the%20Deduction.,The%20amount%20might%20represent%20one%20officer%20making%20%2462%2C046.
https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-employees-shareholders-and-corporate-officers
Ghosn v. Comm’r, T.C. Memo. 1995-192. Purported “loans” from S corporation to its sole shareholder, officer, and director, were wages for purposes of FICA and FUTA taxes. The loans were unsecured demand notes bearing no interest, loans were made entirely at the discretion of shareholder, and the shareholder regularly performed substantial ...
https://www.irs.gov/pub/irs-news/fs-08-25.pdf
Wage Compensation for S Corporation Officers . FS-2008-25, August 2008. ... regarding the tax law for corporate officers who perform services. Who’s an employee of the corporation? Generally, an officer of a corporation is an employee of the corporation. ... and the level of salary must be reasonable and appropriate.
https://www.thebalancesmb.com/what-is-a-reasonable-salary-for-an-s-corporation-officer-397939
Reporting Officer Salaries to the IRS . Each year, when you complete the income tax forms for your corporation or S corporation, you must report corporate officer salaries if the corporation's total receipts are $500,000 or more.
https://dpwcpas.com/what-is-a-reasonable-salary-for-an-s-corporation-officer/
Reporting Officer Salaries to the IRS. Each year, when you complete the income tax forms for your corporation or S corporation, you must report corporate officer salaries if the corporation’s total receipts are $500,000 or more. You will need to use IRS Form 1125-E ...
https://www.nolo.com/legal-encyclopedia/s-corporations-salaries-an-irs-hot-button-issue.html
For example, a CPA who incorporated his practice took a $24,000 annual salary from his S corporation and received $220,000 in dividends which were free of employment taxes. The IRS said that his salary was unreasonably low and that $175,000 of the dividends should be treated as wages subject to employment taxes.
https://www.dsb-cpa.com/s-corporation-officer-must-take-a-salary/
A professional with an advanced degree who takes a salary of $30,000 a year for the full-time management of an S corporation generating $500,000 in net income would be suspect. But taking a salary of $175,000 a year for a 40-hour week might not be.
http://www.scorporationsexplained.com/average-s-corporation-salaries.htm
https://evergreensmallbusiness.com/irs-s-corporation-shareholder-salary-data/
The S Corporation Salaries Number is the Deduction A first thing to note, for example, the S corporation salaries value the IRS data lets you calculate? The value represents the average deduction. So, that $62,046 average just referenced? That’s the average deduction for officer compensation. The amount might represent one officer making $62,046.
https://www.picpa.org/articles/cpa-now-blog/cpa-now/2020/12/16/s-corporation-reasonable-salary-explanation
Say your 100% owned S corporation will make $200,000 in profit prior to any W-2 wages paid to you. Normally, you would take $130,000 as W-2 wages and withdraw the rest as nonwage distributions; the $70,000 of remaining profit flows through to you and your taxable income is only $186,000 ($130,000 W-2 plus $56,000 ($70,000 multiplied by 0.8).
https://www.northwestregisteredagent.com/corporation/s-corp/reasonable-salary
Joe is the sole owner of an S-corporation. The company makes $250,000 a year, and Joe paid himself a salary of $30,000. After expenses, Joe issued himself $175,000 in dividends for the year. After an IRS audit, it was determined that Joe’s $30,000 salary was unreasonable. The IRS determined that a reasonable salary for Joe’s position was $100,000.
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