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S corp owner distribution too much?

Is there a rule of thumb on how much an s corp owner can pass through or take as a distribution compared to w2 wages? Like a % of wages

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S corp owner distribution too much?

There are no specific guidelines (i.e., no rule of thumb). 

 

There are factors that are considered in making the determination as to what constitutes a reasonable salary.

 

See https://www.irs.gov/pub/irs-news/fs-08-25.pdf

 

See also https://www.aicpa.org/resources/article/s-corporation-reasonable-compensation

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1 Reply

S corp owner distribution too much?

There are no specific guidelines (i.e., no rule of thumb). 

 

There are factors that are considered in making the determination as to what constitutes a reasonable salary.

 

See https://www.irs.gov/pub/irs-news/fs-08-25.pdf

 

See also https://www.aicpa.org/resources/article/s-corporation-reasonable-compensation

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