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I took my test today......and, PASSED! Just wanted to thank all of you for the small and large nuggets of information that surface on this board. Next to "hands on", these forums are the best teachers that I have ever encountered. I have learned on some occasions that I wasn't as smart as I may have thought I was. Thanks again. :read:

IRS has authority to reclassify "draws/distributions or other payments to a shareholder" if the shareholder has not taken a reasonable salary for the work performed by the shareholder. If wife has taken nothing out of the S-corp, she does not have to take a salary.

>>how is the income to wife reported<< On Form W-2.

Indeed, congratulations on proving you are qualified which we all knew well! Have a great summer!

I've always appreciated the fact that billing my (& my assistant's) time(s) most-accurately reflects the work I/we've done. There is too little that is uniform about the projects/returns/reports I'm tasked with, from year to year; so I do not 'buy into' the annual blurb from one published consultant or another that "hourly billing is passe." It indeed can be exasperating to have to explain to a client why this year's invoice is "so much more than" last year's, but, every reasonable client can understand that, in the end. (Funny; I can't recall hearing from any client, "Wow, you charged me half what you charged, last year!") Feeling free to jettison unreasonable clients, I nonetheless have seen my practice grow past the point that I could handle without an almost-fulltime assistant, now. I must conclude that "the proof is in the pudding."

Congrats!!

Congrats Marilyn!!