TL;DR Summary S-Corp reasonable salary is the market-rate compensation you must pay yourself before taking distributions, typically ranging from $40,000-$150,000+, depending on your role, industry, and location. The
Last updated: January 30, 2026 If you’re a business owner earning too much to contribute directly to a Roth IRA, the Backdoor Roth IRA and Mega Backdoor Roth
The 20% Qualified Business Income deduction is one of the most valuable tax breaks available to S-Corp owners. And as of July 2025, it’s permanent. But here’s what
Partnerships dominate real estate investing for good reason. The combination of pass-through taxation, debt basis rules, and flexible profit sharing makes partnerships the preferred structure for everything from
Both S-Corporations and partnerships are pass-through entities. Neither pays federal income tax at the entity level. Income flows through to the owners’ personal returns. But the similarities end
Key Takeaways S-Corp tax planning centers on balancing reasonable salary with distributions to minimize self-employment tax The QBI deduction (now permanent under OBBBA) adds complexity: higher W-2 wages
Key Takeaways The best tax planning happens October through December, not during tax season Equipment purchases, retirement contributions, and income timing decisions lock in on December 31st S-Corp
Key Takeaways Tax planning is year-round work, not a December scramble Q1 focuses on entity elections and prior year cleanup Q2 is for mid-year review and estimated payment
Key Takeaways Reasonable salary must be “reasonable for the services performed,” not a specific percentage IRS looks at industry comparables, time worked, experience, and business profitability Too-low salary
Key Takeaways The QBI deduction (Section 199A) is now permanent under the OBBBA, providing long-term planning stability 2026 thresholds: $203,000 single / $406,000 MFJ before limitations apply New