The new IRS proposed regulations confirm that the S corporation treats as wages the reasonable compensation that it pays to its shareholder-employees.

That’s good, and it opens planning opportunities. Even better!

Some commentators had claimed that wages to an S corporation did not count for the Section 199A wage calculation or that it was necessary for the IRS to clarify in its regulations about whether such wages were wages for the 199A calculation.

Now, the tax code and the regulations are aligned with clarity as to the wages paid to the shareholder-employees. ... Log in to view full article.