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- The Deductibles // October 2025
The Deductibles // October 2025
Don’t get spooked by the IRS 👻: S-Corp salary, crypto, and 1099s to fix now
Rachel Richards
October 31, 2025
Hey there, warlocks of write-offs and witches of withholdings,
If you’ve felt ghosted by your CPA this fall, you’re not alone. At Gelt, tax planning isn’t seasonal or reactive; it’s proactive and year round with a team that actually shows up. In this issue, we cover how to set and defend a reasonable S-corp salary, the right way to take money out of your S-corp, what to fix on crypto and 1099s before January, and how recent rate cuts could reduce penalties.
Want hands-on help? Join our 11/19 Bootcamp with Bootstrapper Capital where Spencer Carrol and I will be diving in to more tax tips for growing businesses.
🎃 In This Edition -
🚨 Where the IRS is pointing the spotlight in 2025 and how to stay off it
💼 S-Corp reasonable compensation that meets the bar without extra payroll tax
💰 The right way to take money out of your S-Corp
📉 Rate cuts, penalties, and what may change for your estimates and 1099s
📺 Gelt videos to help guide your tax strategy
⚠️ Upcoming Deadlines to Know
📆 December 31, 2025 — Deadline to:
Take required minimum distributions if you’re 73 or older
Lock in charitable contributions
Harvest gains or losses for 2025
📆 January 15, 2026 — Q4 estimated tax payment due. Plan ahead.
🚨 Where the IRS is pointing the spotlight in 2025. And what to do.
High-income and high-wealth taxpayers, including non-filers. File everything across entities and keep airtight documentation.
Large partnerships and complex pass-throughs. Expect more exams of funds, real-estate partnerships, law firms, and other big pass-throughs, especially around basis, loss limits, and AI-flagged anomalies. Tighten M-3s, capital and basis schedules, and K-1 support.
Digital assets and broker reporting. 1099-DA is coming online in stages. Reconcile wallet activity now so it matches what custodial brokers and you will report.
Corporate jets and executive personal use. Scrub usage logs, W-2 fringe calculations, and expense allocations.
Abusive tax shelters. Micro-captives and syndicated conservation easements remain hot. If you’re in one, get a second opinion and consider remediation.
Employee Retention Credit (ERC) claims. Reviews and disallowances continue. Keep eligibility and payroll files organized and ready.
S-Corp owner compensation. Reasonable pay before distributions is a classic exam area. Maintain a compensation study, time records, and market comps.
International information returns. Verify thresholds and align ownership and transaction reporting across filings.
💼 Reasonable Salary for S-Corps
Your “reasonable” number should reflect your role, time, revenue mix, and market comps for similar work. Quick approach: list what you do as an employee vs. what you earn as an owner. Pay yourself for the employee part, then use distributions for the return on ownership.
Action: Talk to our tax team to confirm your number meets your needs without unnecessary payroll tax.
💰 Practical Guide: How to take money out of your S-Corp
Salary. Must be reasonable for what you do. Subject to payroll taxes.
Shareholder distributions. Not subject to payroll taxes if you already meet reasonable comp. Watch basis.
Accountable plan reimbursements. Tax-free if documented and business-ordinary.
Common mistakes: relying on “60/40” rules of thumb, paying distributions when comp is clearly too low, skipping time and role documentation.
📉 Another rate cut: what it could mean?
IRS interest-based penalties may decline as rates decrease.
Underpayment charges and estimated-tax costs could be lower.
Operational win: contractor compliance gets easier when your 1099 process is clean and on time.
Reference: IRS FAQ on Form 1099-K threshold changes
📺 Newest Gelt content
Bootstrapper Capital × Gelt — “Quarterly Taxes Made Simple in 60 Seconds” Proactive planning, reasonable comp, fewer surprises at tax time.
Inside the Gelt platform — “Save More with Strategy” A quick look at prioritized, dollar-weighted tax moves you can act on before year-end.
📄 Case Studies
Combined QBI, PTET, and primary-residence planning to unlock six-figure savings.
Tightened entity structure and documentation to stay audit-ready.
Smart S-Corp transition with reasonable salary + distributions.
Added accountable-plan reimbursements and a clean payroll cadence.
Is Gelt a Fit for You?
We work with founders, investors, and business owners who are ready to go beyond basic tax prep. If you want to:
✔️ Keep more of what you earn
✔️ Plan with intention, not just react at tax time
✔️ Partner with a team that understands your goals
We’d love to help you take the next step. Schedule a call to learn more