Reasonable compensation
How a defensible S-corp salary figure gets built.
There's no IRS table that sets an owner's salary. There's a standard, a set of factors, and documentation that either exists or doesn't when the return gets examined. Here's how the figure gets built and documented, and where your firm fits.
The standard
What examiners actually weigh.
A round number with no working papers behind it is easy to challenge. A figure that reconciles independent approaches, with the weighting written down, is not. Examiners weigh nine factors from IRS guidance. The ones that decide most cases:
The documentation
The documentation that has to exist.
A defensible figure travels with its record. Next year's refresh then starts from facts instead of memory.
Where firms fit
Owners get the number through the firm they trust.
Your firm stays the advisor. Hearth produces the documented figure as HearthRC Defense, wholesale to your firm, and you deliver it under your own brand at your own rate. The free calculator educates; it never mimics the report.
The workflow
Interview to working papers to reviewed figure, in your firm's brand.
The economics
Wholesale to the firm, firm rate to the client.
The report is priced wholesale; your firm bills the client in your market's range. Public pricing is on the pricing page; the wholesale sheet for partner firms is in the partner kit.
Common questions
Two questions every firm asks here.
The calculator already gave a number.
The calculator educates with ranges from public data. The report is a documented figure: three reconciled methods, working papers, minutes language. An examiner reads working papers, not screenshots.
How often does the figure refresh?
Annually, or when duties and hours change materially. The refresh starts from last year's record instead of a blank intake.
See the documented report.
See what the documented report looks like, or run the entity math with a client's numbers on the calculator.