2021 Compensation Optimization Details
Compensation optimization is the process of reviewing your total “compensation” needs and determining whether changing business entities would help better distribute the compensation across various types of income. Certain entity types will have owner or shareholder compensation requirements that are dictated by the facts and circumstances of the business and what the taxpayer’s personal income needs are currently. Schedule C: Owners are generally free to take cash out of the business at their discretion without further tax consequences and are not required to pay themselves a salary via payroll.