Proactive S-Corporation Tax Planning Services in South Jordan

As a Utah-based virtual-first CPA firm, Madsen and Company provides proactive S-Corporation tax planning through secure online tools and scheduled advisory meetings, supporting owners in South Jordan, Utah, and nationwide.

Our S-Corporation tax planning services are part of our broader tax planning services for business owners and investors.

With over 30 years of CPA experience, we help S-Corporation owners apply IRS rules correctly while minimizing unnecessary payroll and income taxes.

S-corporations offer powerful tax advantages, but only when they’re set up and managed correctly. We help S-Corp. owners understand the rules and use them properly.

What Is S-Corporation Tax Planning?

S-Corporation tax planning is the proactive process of analyzing owner compensation, distributions, business profits, payroll, and timing decisions throughout the year to legally reduce taxes and avoid common IRS and compliance issues.

Unlike basic tax preparation, S-Corporation tax planning focuses on decisions that must be made before year-end to be effective.

This may include:

• Evaluating reasonable compensation for owner-employees

• Optimizing salary vs. distributions

• Coordinating payroll taxes and income taxes

• Planning retirement contributions through the business

• Managing quarterly estimates and cash flow

• Adjusting strategy as profits increase or fluctuate

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S-Corporation Owners We Provide Tax Planning For

Our S-Corporation tax planning services are designed for:

• Solo S-Corporation owners

• Multi-owner S-Corporations

• Service-based businesses operating as S-Corps

• Contractors and trades structured as S-Corps

• Businesses that recently elected S-Corporation status

• S-Corp owners experiencing growth or income volatility

If you’re paying yourself through payroll and distributions, proactive planning is essential.

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Our Proactive S-Corporation Tax Planning Approach

We take a proactive, year-round approach to S-Corporation tax planning, focusing on decisions that impact your taxes before they become locked in.

That means:

• Regular planning check-ins—not once-a-year conversations

• Clear explanations of reasonable compensation and IRS rules

• Strategy that aligns payroll, profits, and cash flow

• Adjustments as income changes throughout the year

Our goal is to help you make confident compensation and distribution decisions while minimizing unnecessary taxes and avoiding compliance risk.

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Why S-Corporation Tax Planning Matters

S-Corporations offer powerful tax advantages—but only when managed correctly.

Without proactive planning, S-Corp owners often:

• Overpay payroll taxes

• Underpay or miscalculate reasonable compensation

• Miss retirement planning opportunities

• Face IRS scrutiny or penalties

• Discover problems after the year is already closed

S-Corporation tax planning works best when decisions are made before year-end, not when a return is already being prepared.

That’s why proactive S-Corporation tax planning—not last-minute tax preparation—is where meaningful savings are created.

How Our Virtual-First S-Corporation Tax Planning Works

• Secure document sharing and payroll coordination

• Scheduled planning meetings focused on compensation and deductions

• Ongoing monitoring of reasonable salary and compliance

• Support for multi-state S-Corporation owners

Frequently Asked Questions About S-Corporation Tax Planning

Why does an S-corporation need tax planning?

S-corporations need tax planning because payroll and distribution rules affect tax compliance and savings.

Unlike sole proprietorships or partnerships, S-corporations are subject to reasonable compensation rules and distribution limitations that require careful coordination. Without proactive planning, owners may miss legitimate tax advantages or create compliance issues that increase audit and penalty risk.

What is a reasonable salary for an S-corporation owner?

A reasonable salary is the amount an owner-employee would be paid for similar work in a comparable business.

The IRS requires S-corporation owners to pay themselves a defensible wage based on duties performed, experience, industry standards, and business activity. Proper documentation and periodic review are critical, as reasonable compensation is one of the most closely scrutinized areas in IRS S-corporation audits.

How do distributions work in an S-corporation?

Distributions are payments to owners that are separate from wages and are not subject to payroll taxes when handled correctly.

After paying a reasonable salary, remaining profits may be distributed to shareholders. Proper coordination between payroll, distributions, and accounting records is essential to maintain compliance and avoid reclassification by the IRS.

How do S-corporation owners reduce taxes legally?

Tax savings come from proper structure, compliance, and coordination — not shortcuts.

Legal tax reduction strategies for S-corporations often involve optimizing owner wages, managing distributions, using compliant reimbursement plans, timing income and expenses appropriately, and coordinating retirement contributions. Each strategy must align with IRS rules and the business’s financial reality.

How often should S-corporation owners review their tax strategy?

At a minimum, S-corporation tax planning should be reviewed annually, and more frequently when income or operations change.

Income changes, new expenses, hiring decisions, or shifts in business goals can all affect the optimal tax strategy. Waiting until tax season often limits available options and increases the risk of surprises.

What are common S-corporation tax planning mistakes?

Most mistakes stem from misunderstanding or ignoring S-corporation rules.

Common issues include underpaying owner salary, mishandling reimbursements, inconsistent payroll processing, poor coordination between bookkeeping and tax filings, and waiting too long to address planning decisions. These mistakes are often preventable with proactive review.

When does S-corporation status stop making sense?

S-corporation status is not always the best long-term structure for every business.

Changes in profitability, ownership, administrative burden, or personal tax circumstances can make alternative structures more appropriate. Periodic evaluation ensures the entity structure continues to support the owner’s financial and business goals. 

Schedule an S-Corporation Tax Planning Consultation

If your business operates as an S-Corporation—or is considering an S-Corp election—proactive tax planning can significantly impact your taxes, cash flow, and compliance risk.

Schedule an S-Corporation Tax Planning Consultation to review your compensation, distributions, and overall tax strategy before year-end decisions are locked in.

Related Articles

• Business Tax Preparation vs Tax Planning
• Our small business tax planning guide explains how structure and timing affect your tax bill.
• Maximizing Tax Savings for S-Corporation Owners: Proactive Strategies That Work