Master the nuances of reasonable compensation, fringe benefit add-backs, and entity-level tax elections to protect your clients.
Even though they have been around for several years, the tax laws pertaining to S corporations remain some of the more difficult areas of the Internal Revenue Code. In this course, we will examine how S corporations break away from the normal tax rules for flow-through entities. We will explore which employee benefits are disallowed for S corporation shareholders, as well as which taxes are assessed at the entity level. Finally, we will discuss how state-level taxation may have changed permanently with the addition of PTE elections.
A major focal point of the curriculum is the concept of reasonable compensation for shareholder-employees. The material explores the guidelines used by the IRS to determine appropriate salary levels, the audit risks associated with minimizing payroll taxes through artificially low wages, and the specific tax treatment of health insurance and other corporate fringe benefits.
Furthermore, the course demystifies the major exceptions to the pass-through rule by examining the specific scenarios that trigger entity-level taxation. The discussion thoroughly breaks down the Built-in Gains (BIG) tax for entities converting from C-Corporation to S-Corporation status, the tax on excess net passive investment income, and LIFO recapture rules. By analyzing these critical areas, this overview delivers the essential knowledge required to evaluate corporate tax strategies, navigate rigorous federal compliance requirements, and safeguard businesses against costly audits and penalties.
Who Should Attend:
Tax and financial advisors who have clients who have formed S corporations.
CPA, CFP, CLU, CPCU, MST, MBA
David Peters is the Founder and Owner of Peters Professional Education in Richmond, VA. He is registered with the U.S. Securities and Exchange Commission (SEC) as an Investment Advisor Representative (IAR) with Peters Financial LLC. He brings over 20 years of experience in financial services, including three years in the hedge fund industry and six years in insurance. David was the first Chief Financial Officer of Compare.com, where he served for more than three years. He holds four master’s degrees, contributes frequently to professional publications, and is a nationally recognized CPE instructor and discussion leader for Surgent seminars and a former instructor for Don Farmer. David received the AICPA Outstanding Facilitator Award in 2021, 2023, and 2024 as well as Surgent's Outstanding Discussion Leader awards in 2019 and 2022. He also co-authored the Virginia CPA Ethics course in 2018, 2019, and 2020, which is a requirement for all CPAs licensed in Virginia. Through Peters Professional Education, David is the author and instructor for over 125 recorded on-demand CPE courses and leads private trainings, in-person tax seminars, and quarterly live tax update webinars. His areas of instruction include accounting, finance, insurance, financial planning, and ethics, and he regularly teaches professionals across the United States.
