12/08/2025
To my fellow business owners, if you own, or file, as an S-Corp, your “reasonable compensation” isn’t optional, it’s one of the IRS’s favorite audit targets.
Set it too low → back taxes, penalties, and interest
Set it too high → wasted payroll taxes.
Set it right → compliance + tax savings.
Annual review is key. Consider conducting a year-end Reasonable Compensation study to safeguard this year’s filings and gives you clarity and confidence going into the next.
DM me if you want help setting the right number for 2026.
More Info: https://www.hiattaccountinggroup.com/tax-info-center/reasonable-compensation-s-corp-guide