What’s an owner worth? Setting a reasonable salary for yourself
Abstract: During an economic downturn, it may be an acceptable short-term strategy for owners to take a pay cut to keep their company afloat. But it’s also important that owners pay themselves what the IRS calls a “reasonable” salary. S corporation owners, in particular, can get into trouble if their salaries are too low. This article offers advice for both start-ups and mature businesses regarding how to determine the amount, form and timing of their owners’ compensation.