The matrix is ridiculous and has nothing to do with the fact you’ve never had a reasonable comp audit. The IRS simply has not been challenging the issue for the last 40 years as long as the owner was taking some amount of W-2 income.
Awesome content, Mark! What if we’re 2 co-owners? Would we take the % of the reasonable compensation matrix and distribute that same payroll between the 2 of us?
Keep in mind that with an S-Corp you will more than likely also have a SEP-IRA. The more you allocate to payroll the more you can contribute to the SEP-IRA, and the more you will add to your future social security benefit. If you make a lot of money, you may want to take payroll up to the maximum taxable earnings rate for social security of $168,600 and take the remainder in K-1 income.
Mark, I am consistently not seeing links to your deeper dive s-corp video in the descriptions. Can you update the descriptions with the link? Thank you!
I just pay myself more than the average wage and forget about what the profit amounts to. If the IRS wants to specify, they should, and not be vague about it. I read on an association of accountants site that no one has been prosecuted unless taking zero payroll. "reasonable" is just way too arbitrary.
I keep looking over my shoulder while watching these videos. Just absorbing this knowledge feels like a crime. At the very least, im absolutely convinced that im being red flagged and put in a database, just for watching. Smdh.. 🙂↔️
when you say a client makes $100K a year, what do you mean exactly? If my business loses $100K a year, and gains $100K the next year, does it count as I make $100K a year?
Does the matrix's Y-axis (% of profit) represent the total payroll or the payroll for each owner/employee? I ask because in my situation we're two S-Corp owners.
An S-Corp is a "pass through" entity. It must file a tax form that reports its income and how much was distributed to owners (K-1s), but those who received the distributions report the income and pay income taxes on their own 1040s. The X-Corp pays no income tax of its own.
One thing I don’t like about trusts owning personal bank accounts is ACH stops working. Banks really really really don’t want interpersonal bank transfers to be a thing, so their title checks on ACH transfers will block transfers to and from them. Heck, you can’t even ACH transfer between a personal account and your S-corp account. I had to write a physical check to fund it, very annoying, and I’ll have to write a business check to get money out.
This might be specific to your bank or the way you're trying to transfer. I don't recall ever having problem moving money within the same bank. In fact, I don't like that some clients have the ability to do this when they manage their own bookkeeping. It really messes of things if they don't know what they're doing.
The matrix is ridiculous and has nothing to do with the fact you’ve never had a reasonable comp audit. The IRS simply has not been challenging the issue for the last 40 years as long as the owner was taking some amount of W-2 income.
I looked down below and didnt find any CPAs to work with in getting my QBO cleared up and filed....
Awesome content, Mark! What if we’re 2 co-owners? Would we take the % of the reasonable compensation matrix and distribute that same payroll between the 2 of us?
Keep in mind that with an S-Corp you will more than likely also have a SEP-IRA. The more you allocate to payroll the more you can contribute to the SEP-IRA, and the more you will add to your future social security benefit. If you make a lot of money, you may want to take payroll up to the maximum taxable earnings rate for social security of $168,600 and take the remainder in K-1 income.
Mark, I am consistently not seeing links to your deeper dive s-corp video in the descriptions. Can you update the descriptions with the link? Thank you!
I just pay myself more than the average wage and forget about what the profit amounts to. If the IRS wants to specify, they should, and not be vague about it. I read on an association of accountants site that no one has been prosecuted unless taking zero payroll. "reasonable" is just way too arbitrary.
I keep looking over my shoulder while watching these videos.
Just absorbing this knowledge feels like a crime.
At the very least, im absolutely convinced that im being red flagged and put in a database, just for watching. Smdh.. 🙂↔️
when you say a client makes $100K a year, what do you mean exactly? If my business loses $100K a year, and gains $100K the next year, does it count as I make $100K a year?
Do you include your own salary with expenses to arrive at the final profit figure for using the matrix?
Does the matrix's Y-axis (% of profit) represent the total payroll or the payroll for each owner/employee? I ask because in my situation we're two S-Corp owners.
Does the S- Corp have to pay state taxes on the profits they make and give out as distributions to the partners?
An S-Corp is a "pass through" entity. It must file a tax form that reports its income and how much was distributed to owners (K-1s), but those who received the distributions report the income and pay income taxes on their own 1040s. The X-Corp pays no income tax of its own.
The camera switching back and forth so much is disorienting
Thank you for the information
I have had multiple winning million dollar instant lottery tickets that I sign and was stolen from me is their any way to get any of that money.
does the s-corp have to pay capital gains tax on stocks/crypto or does above apply as well?
Thanks Mark, I'm an ordained Pastor. Can I set up an S corp. as a pastor?
A church doesn't file an 1120S
Should we use the percentage Biden did in 2017?
Can you elaboreate? Did biden have an s corp?
"None of my clients have ever been audited for taking too little in salary" No, they got busted for other shit lol
One thing I don’t like about trusts owning personal bank accounts is ACH stops working. Banks really really really don’t want interpersonal bank transfers to be a thing, so their title checks on ACH transfers will block transfers to and from them. Heck, you can’t even ACH transfer between a personal account and your S-corp account. I had to write a physical check to fund it, very annoying, and I’ll have to write a business check to get money out.
This might be specific to your bank or the way you're trying to transfer. I don't recall ever having problem moving money within the same bank. In fact, I don't like that some clients have the ability to do this when they manage their own bookkeeping. It really messes of things if they don't know what they're doing.
@@tonihogan ACH implies interbank not intrabank.
“For plunger” “for titan camera man” 👄😻👅