Without an accurate Reasonable Compensation figure, tax planning is just a guess.
1. Educate. Send an issue letter so your clients are thinking about Reasonable Compensation before you meet.
Most S Corp owners, once they understand the issue, will follow your advice as their Trusted Advisor. For those who don’t, sharing the issue letter will document your attempt to do so.
Download Issue letter HERE
2. Stress Test. Is your client’s Compensation figure Reasonable?
If it fails the stress test, it likely won’t survive a Reasonable Compensation challenge.
Download Stress Test HERE
3. Research. Provide an accurate, independent Reasonable Compensation Report to each shareholder-employee.
Research and documentation is now a “must have” with the passage of the TCJA.
4. Get Up-to-Date. Put Section 199A & the QBI on the meeting agenda.