I have a small consulting business which is now my sole income. For this tax year I'll have about $40k in business income, in 2022 it should increase to at least $100k. I formed an S-Corp towards the end of 2020 and have just filed my 2020 taxes. I used a tax professional to prepare the 2020 return (which I didn't actually realize I needed to file as I hadn't make any withdrawals from the company, so learned a lesson there). The tax pro has now retired and I need some advice!
I want to put myself on salary for the remainder of 2021 and into 2022. Given the expected level of billings, what would be a reasonable salary to pay myself per annum (say $60k) and how do I distribute the net balance from the corporation to myself in the most tax-efficient way?
I am unable to advise you on what a reasonable salary would be for your situation. However, I am attaching an article from the IRS regarding what a "reasonable salary" could possibly be.
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