The Real Buzz

Episode 4: What is "reasonable compensation?"

April 10, 2023 Eric & Melissa Broughton
Episode 4: What is "reasonable compensation?"
The Real Buzz
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The Real Buzz
Episode 4: What is "reasonable compensation?"
Apr 10, 2023
Eric & Melissa Broughton

On this episode Melissa and Eric talk about the importance of business owners drawing a salary rather than just taking large distribution at the end of the year. The IRS wants to make sure you are paying a reasonable amount of payroll taxes and so you are supposed to give yourself a “reasonable compensation” for your work. 

The two discuss how you find out what is “reasonable” for the work you do, what to do if your business isn’t profitable yet, and also why it’s important for the growth of your company and your personal financial future to pay yourself a salary. 

In the last ten minutes of the episode they talk about the tax deadline being pushed back for many Californians because of natural disasters and “state of emergency” declarations. April 15th is just a few days away but you may actually have another month to get your taxes done!

For more information and to find resources from the show, visit www.busybeeadvisors.com.



Show Notes

On this episode Melissa and Eric talk about the importance of business owners drawing a salary rather than just taking large distribution at the end of the year. The IRS wants to make sure you are paying a reasonable amount of payroll taxes and so you are supposed to give yourself a “reasonable compensation” for your work. 

The two discuss how you find out what is “reasonable” for the work you do, what to do if your business isn’t profitable yet, and also why it’s important for the growth of your company and your personal financial future to pay yourself a salary. 

In the last ten minutes of the episode they talk about the tax deadline being pushed back for many Californians because of natural disasters and “state of emergency” declarations. April 15th is just a few days away but you may actually have another month to get your taxes done!

For more information and to find resources from the show, visit www.busybeeadvisors.com.