Course 4.3 · 55 minutes

Paying Yourself: Draws, Salary, Distributions, and Reasonable Compensation

Pay yourself the right way for your entity, set an S corporation salary that saves payroll tax without inviting an audit, and run payroll correctly.

Who it is for: Owners of LLCs, S corporations, and partnerships.
Runtime: 55 minutes

Pre-order: this course is in development and appears in your portal the day it is released. Buy 5 or more and every course is 30% off.

See the full track See the full curriculum

Instant download after payment. Nothing is withheld for a later purchase.

What you receive

Reasonable Compensation Memo template, attorney-drafted and annotated
Salary versus Distribution Calculator with payroll tax and the twenty percent deduction (Excel)
Owner Pay decision tree by entity
Payroll Setup and Filing Calendar
S corporation owner health insurance W-2 checklist
The narrated lesson. 55 minutes, cued to the deck, with chapter markers by lesson. Emailed to you the day it publishes, at no extra cost.

What the course covers

01How owners get paid under each entity: draws, guaranteed payments, wages, and dividends8 min
02Self-employment tax versus payroll tax, and where the savings come from6 min
03Reasonable compensation: the rule, the cases, and the factors the IRS uses9 min
04Setting the number: market data and the annual memo6 min
05Payroll mechanics: the quarterly forms, deposits, and the owner's health insurance on the W-27 min
06Distributions and basis: why you cannot take out more than you have5 min
07Worked example: a 150,000 dollar S corporation at a 70,000 dollar salary versus a 100,000 dollar salary, with the twenty percent deduction8 min
08Tricks of the trade: December bonuses, paying the spouse, and keying retirement contributions to wages3 min
09Mistakes and traps: zero salary, late deposits, and shareholder loans3 min

How it fits: Requires 4.1. Pairs with 5.3 and 4.6.

The standard every course holds

A narrated lesson of 45 to 60 minutes, produced as audio
A designed slide deck you download and keep
A computational workbook that runs the actual legal tests
A toolkit of checklists and protocols
A legal authority appendix carrying the two-pass vetting protocol

Written for a diligent reader with no legal education. Professionally narrated using a studio voice model of Brian T. Boyd. The course is recorded instruction, not a live consultation.

Where this course sits

Track 4: Business Planning

This course is one step in a track built around a single outcome. See the full build order and the other courses that get you there.

Back to this track

Educational material from the private client curriculum of Brian T. Boyd. This is legal education for a general audience, not legal advice, and no attorney-client relationship is created by purchasing, viewing, or using it. Tax outcomes depend on your facts and your state.