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Weekly Tax Tip #35

Compensation. Depending on your form of doing business, the IRS may question whether the owner’s compensation from the business is too high or too low. For example, they may question the compensation of the owner of a C corporation as too high and reclassify them as dividends – creating tax at the corporate level. Proper planning and documentation can help prevent the IRS from challenging compensation levels. Need more information? Give me a call at 931-648-4786.