S-corporations are one of the most frequently discussed (but often misunderstood) tax structures for small business owners. While they can offer real savings on self-employment taxes, the benefits aren’t automatic – they depend on your income level, involvement in the business, and whether you’re ready to manage the added compliance responsibilities. Here’s what you need to know about how S-corps work, who they’re right for, and what’s required to maintain one.
Tag: compensation
Understanding K-1 Income in Retirement Plan Design
A frequent and complex challenge for retirement plan advisors can be properly defining compensation for plan eligibility and contribution purposes, including income reported on a Schedule K‑1. Improper reporting of K-1 income may result in compliance errors, contribution miscalculations, and/or plan disqualification. What is K-1 Compensation? Owners of partnerships and LLCs taxed as partnerships typically… [keep reading…]