Beyond the 60/40 Rule: Understanding S-Corporation Reasonable Compensation
Overview
Reasonable compensation is a critical yet often misunderstood aspect of S-corporation taxation—and a frequent target of IRS audits. Misconceptions like the “60/40 rule” are not grounded in fact and fail under scrutiny. This course provides a deep dive into what truly defines reasonable compensation, how to calculate it effectively, and how to defend it during audits.
Through case studies and real-world examples, you’ll gain practical tools to navigate this complex topic, ensuring compliance and protecting your clients. Don’t leave your S-corp clients exposed—equip yourself with the knowledge to advise confidently.
Objectives
• Explain the requirements of reasonable compensation to clients with an S-Corporation.
• Determine reasonable compensation for S-Corporation clients.
• Defend compensation of S-Corporation clients should it be questioned by the IRS.
• Ensure proper due diligence as a tax preparer.
• Apply court rulings and IRS requirements to client specific situations.
• Ensure proper documentation of due diligence as a tax preparer.
• Successfully analyze case studies regarding reasonable compensation.
Sponsor
Leader(s):
Leader Bios
Jason Dinesen
ReasonableSalary.com handles your shareholder-employee W2 wage calculations from start to finish. Our engineers apply the same methods and datasets used by IRS General Engineers in court. We deliver comprehensive reports without requiring you to learn new software. Our reports provide a data-driven, defensible foundation for your client’s compensation strategy.
Jason Dinesen (EA, LPA) is a tax nerd, entrepreneur, tax expert and a well-known presenter of continuing education courses.
Known for his sharp tax interpretations, he is one of the quickest to bring the analysis of the latest tax updates and IRS guidance to the professional community. Jason has coached over 200,000 accounting, tax, and HR professionals on various topics of accounting, individual taxation, corporate taxation, professional ethics and much more.
He has presented over dozens of webinars on Form 1099 (for 10 years on this subject!); marriage in the tax code; tax updates; the new Form W-4, payroll updates, filing status, tax credits, corporation and partnership taxation and other issues relating to the modern-day setting.
Jason always had a knack for speaking and news reporting. He is regularly featured as an anchor for Radio Iowa and Radio Minnesota, is a frequent Podcast Guest and hosts his own Podcast.
Member Price $0.00