Question
You are the tax accountant for Mr. Edwards who owns an S Corporation.He wants to reduce his salary by one-third in order to save on
You are the tax accountant for Mr. Edwards who owns an S Corporation.He wants to reduce his salary by one-third in order to "save on taxes" and have more money to reinvest in his business.He works 50 plus hours a week to see his business succeed.Each year the business has increased its profits.This is mainly due to Mr. Edwards' and his dedicated employees' hard work and the large reinvestments he has made into the business.What considerations would you take into account when advising Mr. Edwards on his idea of reducing his salary?Are there any moral or ethical considerations in this situation?
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