How Much To Pay Yourself | Reasonable Compensation Myths
In this video I discuss Reasonable Compensation. If you haven’t heard that term before, reasonable compensation is the amount of wages you as the business owner should be paying yourself for services that you provide to your business. In this video I cover:
Why is IRS concerned about Reasonable Compensation?
Why is it important to pay yourself Reasonable Compensation?
How does the Tax Code and IRS define Reasonable Compensation?
What you should do to determine reasonable compensation for your business?
I also bust the following myths:
(a) Your reasonable compensation should be based on your business profitability
(b) Your reasonable compensation should always be more than the distributions you take
(c) You have to take reasonable compensation even if your business isn’t profitable
(d) You must take reasonable compensation even if you don’t take money out of the business
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This video was created for informational purposes and it is not to be construed as legal and tax advice specific to your unique situation. Some of the links above are affiliate links which means that if you purchase a product or service with the provided link, I may receive a commission with no additional cost to you.
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