Reasonable Salary
“As an S-corp owner, how do I figure out a reasonable W-2 salary that the IRS will not challenge during an audit?”
For an S-corp owner, reasonable W-2 compensation is often evaluated by looking at the actual services performed, how much time is spent in the business, and what similar workers are paid in the same market. The IRS may also consider the owner’s training, responsibilities, and whether the company has a history of paying distributions versus wages. In many cases, the answer depends on how the business operates, the owner’s role, and the overall compensation pattern reflected in the records. Clear payroll documentation and support for the salary decision often matter if the return is examined. Working through the specifics with a CPA is the cleanest way to land on the right move.
In your 60-minute session, the KGOB advisor handling it will:
- Read your exact situation and tell you, in plain English, what’s actually going on.
- Lay out your options and the trade-offs — no jargon, no judgment.
- Give you a clear next step you can act on, whether that’s with us or on your own.
“How do I know if my S-corp salary is reasonable enough?”
“What is a reasonable salary for me as an S-corp owner?”
“I'm trying to figure out a reasonable salary for my S-corp, how do I tell?”
“I took all my S-Corp profit as owner distributions last year and paid no wages, how do I fix this mistake before tax time?”
This page is a prompt to start a conversation, not tax or legal advice, and states no tax-law specifics as fact. A consult session does not by itself create an ongoing engagement. We do not promise specific outcomes or savings. Kohari Gonzalez Oneyear & Brown PLLC — Charlotte, NC.
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