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The IRS Has No 60/40 Rule for S Corp Salaries “The IRS expects you to take 60% as salary and 40% as distributions.” If you own an S Corp, there’s a good chance you’ve heard some version of that advice. Maybe it was 60/40. Maybe it was 50/50. Maybe someone told you to pay yourself

Two owners. Same profit: $200,000. Same industry. Same role. Wildly different salaries  and only one of them holds up under scrutiny. Owner A pays himself $28,000 in salary and takes the rest as distributions. There’s no wage benchmarking behind it, no written analysis, and he hasn’t revisited the number since he incorporated. If asked, he

“I file my 1120-S every year, so I’m covered.” It sounds reasonable. Your accountant prepares the return. You sign it. The IRS accepts it. Another tax year is officially in the books. So you’re compliant, right? Not necessarily. Form 1120-S is an annual tax return. It is not a year-round operating system. Running an S

Imagine two S Corp owners. Same industry. Same $180,000 of business profit. Both pay themselves a salary and take additional money from the company as distributions. On the surface, they look similar. But if someone asked each owner one very simple question— “How did you determine your salary?” —only one has a good answer. And

Somewhere along the way, “once you hit $50,000 in profit, elect S Corp” became gospel. Business owners repeat it to each other. Social media repeats it. And, unfortunately, some advisors repeat it too. It sounds helpful because it gives you a clean number to watch for. There’s just one problem: It isn’t a rule. There

Arizona businesses know seasonality better than most. Between snowbird season, summer heat driving customers indoors (or out of state entirely), and tourism patterns that shift dramatically by month, a lot of local businesses deal with income that swings hard depending on the time of year. Bookkeeping for that kind of business needs a slightly different

If your slow season keeps catching you off guard — even though it happens every year — the problem usually isn’t the slow season itself. It’s that you don’t have a forecast, so it feels like a surprise every single time. Why “knowing” your slow season isn’t the same as planning for it A lot

Back-to-school season feels like a “consumer” thing — parents buying supplies, new clothes, that whole scramble. But if you run a small business, especially here in Arizona, this season quietly affects your cash flow too, whether you sell directly to families or not. Why this season hits small businesses harder than people expect Customer spending

You don’t need an accounting degree or an hour of free time to keep your books in decent shape. You need one habit, done consistently, for about fifteen minutes a month. Here’s exactly what it looks like. The habit: A monthly mini-review Once a month — same time every month works best, like the first

We get asked this question constantly: “Should I switch to an S-Corp to save on taxes?” And the honest answer is — maybe, but not always, and definitely not without doing the math first. Let’s talk through it like actual humans instead of tax jargon. What’s the appeal of an S-Corp, anyway? The big draw