Reasonable Salary
“I want to lower my reasonable salary because I am reinvesting all profits back into equipment, is reinvestment a valid excuse for the IRS?”
Questions about reasonable salary often turn on how the business is structured, the owner’s role in day to day operations, and whether profits are being paid out, retained, or used for capital purchases such as equipment. Reinvestment can be one factor in the analysis, but it is typically not treated as a stand alone explanation, because the IRS often looks at the total compensation picture, including the services performed, the company’s earnings, and what similar businesses pay for comparable work. The details of the equipment purchases, cash flow, and ownership compensation history can all affect how the issue is viewed. Sitting down with a CPA for thirty minutes is usually enough to draw a clean line on this.
In your 90-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.
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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