SCorpDesk / 2026 S-Corp & QBI Guides / 2026 S-Corp Reasonable Salary Calculator & IRS Rev. Rul. 74-44 Board Minutes Generator
2026 S-Corp Reasonable Salary Calculator & IRS Rev. Rul. 74-44 Board Minutes Generator
How do you determine a defensible S-Corp Reasonable Salary for 2026?
Under IRS Revenue Ruling 74-44 and Fact Sheet FS-2008-25, an S-Corporation shareholder-employee must receive reasonable W-2 compensation commensurate with the duties performed before taking FICA-free K-1 distributions. Most profitable S-Corps set officer compensation between 35% and 50% of pre-salary net income based on BLS occupational wage data and document it in annual Corporate Board Minutes.
Under IRS Revenue Ruling 74-44 and Fact Sheet FS-2008-25, an S-Corporation shareholder-employee must receive reasonable W-2 compensation commensurate with the duties performed before taking FICA-free K-1 distributions. Most profitable S-Corps set officer compensation between 35% and 50% of pre-salary net income based on BLS occupational wage data and document it in annual Corporate Board Minutes.
Frequently Asked Questions
How do you determine a defensible S-Corp Reasonable Salary for 2026?
Under IRS Revenue Ruling 74-44 and Fact Sheet FS-2008-25, an S-Corporation shareholder-employee must receive reasonable W-2 compensation commensurate with the duties performed before taking FICA-free K-1 distributions. Most profitable S-Corps set officer compensation between 35% and 50% of pre-salary net income based on BLS occupational wage data and document it in annual Corporate Board Minutes.