Corporate Officers Must Be on Payroll: Why You Can't Take Distributions Only
Corporate officers who work in the business are employees under IRS rules — wages, withholding, and FICA apply even to sole shareholders taking distributions.
#owner-compensation
Owner Compensation
Strategies for structuring business owner pay, benefits, and tax-efficient compensation
Constructive Dividends, Explained: The Personal Expenses the IRS Reclassifies as Taxable Dividends
The IRS can reclassify your salary top-up, company-paid bills, and shareholder loans as taxable dividends — and deny the corporate deduction.
New Comparability 401(k)s: Cross-Testing Profit Sharing for Owner-Heavy Firms
Cross-tested profit sharing lets a 55-year-old owner take a 13.2% allocation while staff receive the 4.4% gateway minimum — how new comparability 401(k)s pass IRS testing, what they cost, and when they backfire.
Quebec Just Cut Your Small Business Tax Rate to 2.2%: What Incorporated Owners Must Do Before Year-End
Quebec's Information Bulletin 2026-3 cuts the provincial small business rate from 3.2% to 2.2% for taxation years beginning after April 29, 2026, lowering the combined rate on the first $500,000 of active business income to 11.2% and saving a qualifying CCPC up to $5,000 a year. Calendar-year corporations wait until 2027, the 5,500 remunerated-hours test still applies, and a matching increase in non-eligible dividend tax changes the salary-versus-dividend math.
Newfoundland and Labrador Is Cutting Its Small Business Tax Rate to 1% — What the Phased Cut Means for Your Corporation
Newfoundland and Labrador's April 2026 budget phases its small business corporate tax rate from 2.5% to 1.0% by 2028, retroactive to January 1, 2026 — dropping the combined federal-provincial rate from 11.5% to 10.0%. Here's the year-by-year math, the dollar savings at the $500,000 limit, and the planning moves worth reviewing.
Stacking the Self-Employed Health Insurance Deduction with the Premium Tax Credit, HSA, and Augusta Rule: A 2026 Owner Compensation Playbook
A field guide to coordinating the Section 162(l) self-employed health insurance deduction with the Premium Tax Credit's circular calculation, HSA contributions, and the Augusta Rule (Section 280A(g)) — including Form 7206 mechanics, S-corp W-2 Box 1 reporting under IRS Notice 2008-1, Medicare Part B and D deductibility, and 2026 contribution limits.
The Augusta Rule: How Business Owners Rent Their Home to Their S-Corp for 14 Days a Year Tax-Free
Internal Revenue Code Section 280A(g) lets a business owner rent a personal residence to their own S-corporation for up to 14 days a year and exclude every dollar from personal gross income while the business deducts the rent under Section 162. The Sinopoli case shows what survives an audit and what does not.
Reasonable Compensation for S-Corp Owners: How to Set Your Salary, Survive an Audit, and Avoid Six-Figure Penalties
A CPA paid himself $24,000 while taking $200,000 in S-Corp distributions, lost in the Eighth Circuit, and owed six figures in back payroll taxes and penalties. Here is how the IRS evaluates reasonable compensation, the audit red flags, and a defensible methodology for setting an S-Corp owner salary.
How to Pay Yourself as a Small Business Owner: Salary vs. Owner's Draw
Learn the difference between owner's draw and salary, which method to use based on your business structure, IRS rules for reasonable compensation, and tax optimization strategies to pay yourself the right way.