As an S Corporation owner, reasonable compensation is likely a concept that has been discussed with you. With the passage of the Tax Cuts and Jobs Act, this topic may be one that needs further explored. A 20% deduction is now available based on your Qualified Business Income, essentially net taxable profit of your entity. If your wage is too high coming out of your S Corporation, you may be leaving a portion of this valuable deduction on the table. With the New Year upon us, now is the time to make necessary adjustments to your wage.
Give us a call today at 765-428-5000 or email firstname.lastname@example.org to explore this tax planning opportunity.