Salary Sherpa
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How to Elect S Corporation Tax Status in the United States: A Complete Guide for Business Owners
Electing S corporation tax status is one of the most powerful tax planning moves available to small business owners in the United States. By filing IRS Form 2553, eligible LLCs and corporations can enjoy pass-through taxation—avoiding double taxation on corporate profits—while potentially saving thousands of dollars annually on self-employment taxes. However, the election process involves…
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The S-Corp Checklist: What to Do in Your First 30 Days After Election
Congratulations—you’ve filed Form 2553 and the IRS has accepted your S corporation election (or you’re still waiting for approval). But here’s the reality check: making the election is only the start. The choices you make in the first 30 to 90 days after your S-Corp status takes effect will lay the groundwork for tax savings,…
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Dear Tax Pros, The IRS Left Us Guessing on S Corp Pay — But Salary Sherpa Finally Solves It
Let’s be honest: for all the ink spilled over S corporations, the IRS has never given us clear, consistent guidance on what “reasonable compensation” really means. We’ve been stuck for decades in the same loop — trying to balance tax savings, client expectations, and compliance — with no definitive formula, no safe harbor, and no…
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From Mob Poker Rings to Marketing Firms: What Terry Rozier & Chauncey Billups (Hypothetically) Would’ve Learned About Reasonable Compensation
From Mob Poker Rings to Marketing Firms Let’s set the scene: imagine that Terry Rozier and Chauncey Billups—yes, those two NBA standouts—didn’t just score buckets on the court. In our hypothetical dark-comedy version of their lives, they find themselves in the business of laundering cash from rigged poker games tied to the mob. And since…
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The Simple Truth About S Corp Compliance: It’s Easier Than You Think
If you’re an S corporation owner, you’ve probably heard this before: “The IRS is watching how much you pay yourself.” That one line can make even the most seasoned entrepreneur nervous. But here’s the good news — S corp compliance isn’t complicated when you understand what the IRS expects. With a little structure (and the…
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Why Every S-Corp Owner Needs to Pay Attention to Reasonable Compensation
If you own an S-Corporation, there’s one compliance requirement you absolutely need to get right—reasonable compensation. After nearly 15 years preparing thousands of tax returns and working directly with business owners, we’ve seen firsthand how easy it is for reasonable compensation to become an afterthought. So many S-Corp owners focus on the tax benefits—and understandably so!—but forget…