Your Books Accounting LLC
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Susan is an ex-federal auditor with experience in accounting, auditing, bookkeeping, payroll and tax. Her entire team is certified in QuickBooks and Susan is a QuickBooks ProAdvisor in both desktop and online. In addition, Susan has experience in several other software programs. The company was formed because Susan had a desire to give back. The best way she felt she could do that was by helping new and small business thrive by making Your Books Accounting part of the business team.
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ConstructionMining, quarrying, and oil and gas extractionUtilitiesRetail tradeProfessional, scientific and technical servicesWholesale tradeTransportation and warehousingOther services
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RevenueOnly for logged in members
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309 Monticello Drive, Charles Town, West Virginia, United States
Products we sell
- - Accounting
- - Taxation services
Markets we serve
- - United States
- - Virginia
- - West Virginia
- - Maryland
- What is Reasonable Compensation?For small businesses formed as an S Corporation and with plenty of profits, reasonable compensation is a term you may want to be familiar with. Many small businesses have organized as an S Corporation form of entity. In many cases, the S Corp election allows a business owner to save money on self-employment taxes, especially if they are operating as a sole proprietor. S Corp profits, or distributions, are not subject to payroll taxes. If you are a business owner taking a salary and contributing substantially to the operations of the business, you may think that you should just take the distributions and forget the salary. After all, think how much you would save in payroll taxes. But this has already been tried and shot down by the IRS in the courts. And this is where the term reasonable compensation comes in. The IRS requires that business owners that perform a substantial contribution to the business be paid a salary according to a number of factors. This is called reasonable compensation. You can’t pay yourself below market and take a large amount in distributions. The IRS has issued a fact sheet that describes the guidelines that can be used to determine reasonable compensation. They include employee training, experience, duties, time spent, history of distributions, bonuses, and many other factors. There are also reasonable compensation ramifications for C Corporations as well. If reasonable compensation is an issue or concern for your business, please feel free to reach out and let us know how we can help.
Susan Tolbert @ Your Books Accounting LLCAug 29, 2017, 4:03:53 PM
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