Hello everyone! Read below to learn two simple steps you can take NOW to get prepared for year-end taxes.

If you want to get ready for year-end tax planning, now is a good time to start. Here is the simplest first step you can take to make sure that you’re prepared when the time comes to file your taxes in March and April.

If your business is an S-Corp, are you making sure that you’ve taken a reasonable salary? If you don’t pay yourself a reasonable salary, you are risking raising a red flag with the IRS. Here’s how to calculate how to pay yourself a reasonable salary:

1. How much would you have to pay someone else to do your job? This varies between different industries and requires research on what is considered a normal figure for your position.

2. If the salary you set for yourself is low, yes you may receive more tax savings in regards to FICA tax, however... if it is a higher and more reasonable salary, you would be at less risk from any IRS audit. The goal here is to come up with the correct reasonable salary that gives you the best tax savings possible with the least amount of risk.

Remember IRS audits are expensive. Tax savings resulting in an audit will always cost your business more than the potential tax savings