Tax Cuts and Jobs Act: Reasonable Compensation for S Corp Shareholder-Employees (Completed)

Date: Monday, July 15, 2019
Instructor: Greg White
Begin Time:  9:00am Pacific Time
10:00am Mountain Time
11:00am Central Time
12:00pm Eastern Time
CPE Credit:  2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC

We’ll provide a broad overview of the reasonable compensation rules, including up-to-the-minute changes. Then, we’ll cover how the Tax Cuts and Jobs Act affects decision-making in grey areas, and how to determine the optimum amount of compensation (within a reasonable range) for S corporation shareholder-employees.

We’ll compare S corporations vs. LLCs under the new tax act. When do S corporations provide greater qualifying business income deductions (20% passthrough deduction) – and when they provide less.

Who Should Attend
CPAs, EAs, tax preparers and other tax professionals.

Topics Covered

  • Reasonable compensation case law
  • When to pay less compensation to increase the 20% passthrough deduction
  • When to pay a shareholder employee more compensation to increase the 20% passthrough deduction
  • What amount of wages optimizes the 20% passthrough deduction
  • When are S corporations better choices for reducing overall taxes — and when aren't they
  • What is the "cost" of paying less in payroll taxes

Learning Objectives

  • Identify how determine "reasonable compensation" for S corporation shareholders
  • Recognize and apply the reasonable compensation rules in specific settings
  • Describe how to maximize S corporation shareholders' 20% passthrough deduction
  • Identify and apply a formula to determine the optimum amount of wages to maximize the 20% passthrough deduction
  • Describe how to adjust reasonable compensation (within a reasonable range) to maximize the 20% passthrough deduction

Level
Intermediate

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Participants should have a minimum of 2 years’ experience in the tax area including preparation of Forms 1120S

Advance Preparation
None

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