The IRS announced on August 24th that is has stepped up efforts to collect employment taxes from S-Corp. shareholders and officers.
I am Lynn Spencer, and over the years I have spent a fair amount of time writing about and providing real life examples as to how small business owners can get large tax breaks by structuring their businesses as a Sub-Chapter S Corporation. This is a corporation from where the earnings and losses flow through on a pro-rata basis to the shareholders to their personal tax returns. The shareholder employees must pay themselves a “paycheck”, and the compensation must be deemed “reasonable” on an annual basis.
At Killingsworth Spencer CPAs, I see far too many instances where entrepreneurs fail to properly optimize the leverage they have in their corporate setup and pay too much in overall taxes, or the opposite where they fail to pay any employment taxes. The S-Corp owners who pay little to no employment taxes are the ones in the IRS crosshairs.
Just like Goldilocks, she doesn’t want to pay too much or get into trouble by paying too little in taxes. She wants to find the amount that’s “just right.”
Killingsworth Spencer CPAs specializes in working with the small to medium size business owner to find the amount of taxes to pay that will keep you out of the IRS crosshairs. Give me a call at 770-552-8286 so we can discuss how to make things just right for you.