S-Corp Accountant in Richmond, VA
The day your business becomes an S-Corporation, your tax life splits in two. On one side sit the advantages: profit above your salary is typically not subject to self-employment tax, and the company's income lands on your personal return through a Schedule K-1. On the other side sit the obligations: a defensible salary, payroll filings, basis records, and a separate business return with its own March deadline. An S-Corp accountant's job is to help keep the first side bigger than the second, year after year.
That is the work The RVA Accountant, PLLC does for S-Corporation owners across Greater Richmond. The standard here is a simple one: an S-Corp file built in this office should be documented well enough to explain itself — to you, to a lender, or to the IRS.
What the Engagement Usually Looks Like
Most S-Corp engagements begin with the same three checkpoints. First comes a review of the prior return, the current books, payroll history, and how owner draws have been handled so far. Next comes the model: what a defensible salary may look like, whether the election still makes sense at the current profit level, and where basis, estimates, or payroll compliance may need attention. From there the work settles into a rhythm of payroll review, tax projections, return preparation, and course corrections while the year is still open.
What an S-Corp Accountant Handles for You
Four responsibilities sit at the center of S-Corp tax work. Most owners have heard of each one; fewer have seen all four working together, which is where the election either earns its keep or quietly leaks money.
A reasonable salary you can defend
The IRS expects a shareholder who works in the business to take reasonable compensation — roughly, what you would pay someone else to do your job — before taking distributions. What counts as reasonable depends on your role, hours, experience, and market pay data, and it should be documented rather than guessed. The firm helps owners set a salary with support behind it and revisits the number as the business changes. The benchmarks and factors that matter are covered in S-Corp reasonable compensation.
The payroll-versus-distribution split
Wages run through payroll with withholding and payroll taxes; distributions typically do not, which is where the election's savings come from. The split is not set-and-forget: as profit moves, the right balance may move with it, and the records behind each distribution matter as much as the amount. For how to think about the ratio, see S-Corp distributions vs. payroll.
Basis tracking — the number nobody tracks
Your stock basis is, roughly, your investment in the company for tax purposes. It rises with income and contributions, falls with losses and distributions, and quietly controls three things: whether a distribution is tax-free, whether a loss is deductible this year, and part of the math when you eventually sell. Distributions above basis may be taxable, and the IRS requires a basis schedule (Form 7203) in several common situations. The firm maintains basis schedules year over year, rather than reconstructing them under deadline pressure when a form suddenly demands one.
Form 1120-S, your K-1, and both returns in one place
The S-Corporation files Form 1120-S and issues each shareholder a K-1 that flows to the personal return. When one CPA prepares both filings, salary, distributions, basis, and estimated taxes stay consistent across them, and planning openings surface instead of falling between two preparers. That coordination is the quiet advantage of running the business and household filings through one tax preparation relationship.
When the S Election Typically Pays for Itself — and When It Doesn't
The honest answer is that it depends on the numbers, and the numbers are checkable before you commit to anything.
The election typically starts paying for itself when profit consistently runs well above what a reasonable salary for your role would be. The profit above that salary may escape self-employment tax, and when those projected savings clearly exceed the added costs — payroll processing, a separate return, registrations, a bit more bookkeeping discipline — the structure makes sense on paper and in practice.
It typically does not pay when profit is modest or irregular, when a defensible salary would consume most of the profit, or when the administrative load outweighs the savings. And appreciated rental real estate usually does not belong inside an S-Corporation at all: rental income is generally not subject to self-employment tax in the first place, and moving property out of an S-Corp later may trigger taxable gain.
Two more wrinkles deserve modeling before you decide. Your salary changes your QBI deduction math, covered next. And for some owners, Virginia's elective pass-through entity tax may affect how state taxes are paid and deducted. This is exactly the kind of decision year-round tax planning exists to test with projections instead of folklore. The full trade-offs, in both directions, are cataloged in converting to an S-Corporation: advantages and disadvantages.
QBI Is Permanent Now — Your Salary Math Should Know
The qualified business income deduction — generally up to 20% of qualifying pass-through income — was made permanent by the One Big Beautiful Bill Act of 2025. Permanence changes the planning posture: QBI is no longer a temporary bonus to grab before a sunset date, but a lasting variable in every salary and distribution decision an S-Corp owner makes.
The interaction cuts both ways. A higher salary reduces the pass-through profit that may qualify for the deduction, while at higher income levels the W-2 wages your S-Corp pays may help support it. The right answer rarely comes from a rule of thumb; it comes from running your actual numbers both ways. For what permanence means in practice, start with QBI made permanent: action steps for S-Corps and LLCs.
Your S-Corp Year at a Glance
An S-Corp calendar carries more dates than a sole proprietorship's, and your accountant should be driving that calendar rather than reacting to it. For calendar-year S-Corporations, the rhythm typically looks like this:
- January 31. W-2s reach employees and the Social Security Administration; the fourth-quarter payroll report (Form 941) is filed.
- March 15. Form 1120-S is due, or extended to September 15. K-1s go out to shareholders either way.
- April 15. Personal returns are filed with those K-1s, and the first-quarter estimated payment is due.
- April, July, and October. Quarterly payroll filings continue. Mid-year is the natural moment to compare salary against year-to-date profit and adjust while it is cheap to do so.
- June 15 and September 15. Second- and third-quarter estimates, trued up to actual results rather than January guesses.
- October through December. The planning window: salary review, retirement plan funding, a distribution-and-basis check, and a QBI projection before December 31 closes the year.
- January 15. The final estimate for the prior year, and the cycle restarts.
When one of these dates falls on a weekend or legal holiday, the deadline moves to the next business day, so the exact date shifts from year to year.
Miss one of these and the others get harder; hit them in order and filing season becomes the least interesting part of the year — which is the goal.
S-Corp Questions, Answered
When does electing S status typically make sense?
There is no universal profit threshold, despite what internet rules of thumb suggest. The election typically deserves a look when profit consistently exceeds a reasonable salary for your work by a comfortable margin, and the projected self-employment tax savings clearly outpace the added payroll, filing, and administrative costs. The reliable way to know is a projection built on your actual numbers, not someone else's example.
I have been taking distributions with no payroll. How bad is it?
It is fixable, and addressing it beats ignoring it. When a working shareholder takes no salary, the IRS may reclassify distributions as wages, which can mean back payroll taxes and penalties. The practical path is typically to establish a defensible salary with clean payroll going forward, then review recent years with your CPA so you understand any exposure before it finds you.
Is it too late to elect S status for this year?
Maybe not. The election on Form 2553 is generally due within the first two months and 15 days of the tax year it covers, but late-election relief may be available in qualifying circumstances. Depending on timing, the practical choice is usually relief for the current year or a clean election effective next January 1. It is worth a conversation before assuming the window closed.
Should my rental properties go into my S-Corp?
Typically no. Rental income is generally not subject to self-employment tax, so the election's core benefit does not apply, and pulling appreciated property out of an S-Corporation later may trigger taxable gain. Many investors hold rentals in other structures and reserve the S-Corp for operating income. Talk it through before deeding anything anywhere.
Do you prepare both the 1120-S and my personal return?
Typically yes, and the pairing is where much of the value lives. Salary, distributions, basis, estimated taxes, and the QBI calculation all cross between the two filings, so preparing them together keeps the story consistent and surfaces planning openings that separate preparers may never see.
What does an S-Corp accountant cost in Richmond?
The fee typically follows what the engagement includes: bookkeeping condition, payroll support, planning depth, and the 1120-S plus personal returns. Engagements are scoped in writing after a review of your records, with estimated fees stated up front rather than discovered later. A quick call is enough to outline a likely range.
Ready to Talk?
Bring your latest 1120-S, or just bring questions. Call (804) 923-4286 or schedule a consultation to review your salary, distributions, basis, and QBI position with a CPA who works with S-Corporations all year — and who will explain each recommendation until it actually makes sense. Email works too: info@thervaaccountant.com.