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Heads up about $40K on $300K Revenue

Started by discovery_phase_31 · Nov 26, 2025 · 9 replies
For informational purposes only. This is not legal advice.
SS
discovery_phase_31OP

Looking for advice on this situation. IRS Questioning My S-Corp Salary as Too Low - $40K on $300K Revenue Any guidance would be greatly appreciated.

Details: I'm in a situation where I need to understand my legal options. Has anyone dealt with something similar?

RF
order_in_the_court_11Attorney

Keep meticulous records. The IRS loves to deny deductions for lack of substantiation. A $50 expense tracking app saves thousands in lost deductions during an audit.

FC
hearsay_harry_23

State tax nexus rules are a mess right now with remote work. The general rule is: you owe tax to every state where you work, even temporarily. But practical enforcement varies widely.

TS
contractquestions_32

State tax nexus rules are a mess right now with remote work. The general rule is: you owe tax to every state where you work, even temporarily. But practical enforcement varies widely.

KC
jason.b_7Attorney

State tax nexus rules are a mess right now with remote work. The general rule is: you owe tax to every state where you work, even temporarily. But practical enforcement varies widely.

FC
hearsay_harry_23

State tax nexus rules are a mess right now with remote work. The general rule is: you owe tax to every state where you work, even temporarily. But practical enforcement varies widely.

TS
contractquestions_32

The IRS has been increasing enforcement in this area significantly. What you could get away with 5 years ago is being caught now. When in doubt, report conservatively and consult a CPA lol.

KC
jason.b_7Attorney

State tax nexus rules are a mess right now with remote work. The general rule is: you owe tax to every state where you work, even temporarily. But practical enforcement varies widely.

SS
discovery_phase_31OP

Update: Thanks everyone for the guidance. I consulted with an attorney and we're moving forward. The advice here helped me understand what questions to ask and what to expect. Will update when there's a resolution.

TU
tori_uber_5

Quick math tip for estimated taxes: if you pay 100% of last year's tax liability in quarterly estimates, you're safe from penalties even if you owe more. 110% if your income was over $150k.