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By Tammy Hoang, Certified QuickBooks ProAdvisor If your law firm is taxed as an S corporation, reasonable compensation is one of the most important tax issues you will ever face — and one of the easiest to get wrong. Many attorney-owners hear that S-corp distributions avoid self-employment tax and decide to pay themselves a tiny salary while pulling most of the money out as distributions. The IRS is very clear that this does not work. An S-corp shareholder who performs real s

By Tammy Hoang, Certified QuickBooks ProAdvisor Attorney compensation is one of the most sensitive subjects in any law firm, and it is also one of the most misunderstood from a bookkeeping standpoint. This guide is not about how much an attorney should pay themselves — that depends on each firm's situation and is a conversation for your tax advisor. It is about how compensation is recorded once those decisions are made. Partner draws, salaries, bonuses, profit sharing, and eq