Money Moves for CRNAs

Welcome to Money Moves for CRNAs — the podcast for 1099 CRNAs who want clarity, confidence, and control over their money. This podcast is for educational purposes only and is not personalized tax or financial advice. Here’s your host, Randy Larkin, with Atlanta Tax Planner.

Hi there, this is Randy Larkin.

If your S-corp salary was $180,000 last year, should you just use $180,000 again this year? Maybe. But not just because that was your salary last year.

In the last episode, we talked about reasonable compensation — and why your S-corp salary should not simply be set and forgotten. Your hours may have changed. Your responsibilities may have changed. Your contracts may have changed. And your business income may have changed.

So today, let’s look at four reasons your S-corp salary may need another look.

1. YOUR HOURS CHANGED
Let’s start with something simple. How much are you actually working? Maybe last year you worked 48 weeks. This year, you are taking more time off. Or maybe you added another contract and you are working more.

That matters. Reasonable compensation should reflect the work you are actually performing for your S corporation. So if the amount of work changes, it makes sense to ask whether your salary should still be the same.

This is also why copying another CRNA’s salary does not solve the problem. They may work a completely different schedule. Their facts are not necessarily your facts.

2. YOUR DUTIES AND RESPONSIBILITIES CHANGED
Hours are only part of the picture. We also need to look at what you are actually doing.

A CRNA business can involve more than providing anesthesia. You may spend time reviewing contracts, handling payroll, managing business tasks, or taking care of other responsibilities. And those responsibilities can change over time.

So two CRNAs could work a similar number of hours and still have different facts.

The question is not just: “How many hours did you work?” It is also: “What work were you actually doing?”

3. YOUR CONTRACT OR WORK SETTING CHANGED
Now suppose you accept a new contract. Maybe you work more days. Maybe the assignment changes your responsibilities. Maybe you move into a different work setting.

A new contract does not automatically mean your salary has to change. But it can change the facts behind the salary. And that is what you want to pay attention to.

We have talked in recent episodes about how one new assignment can affect several parts of a CRNA’s tax situation. The same idea applies here.

When the facts change, review the tax plan. Do not assume the number you used last year still fits today.

4. YOUR BUSINESS INCOME CHANGED
Now let’s talk about business income. Suppose your S corporation made substantially more money this year. Or substantially less.

Does that mean you simply take your business income and multiply it by a percentage to get your salary?

No.

Reasonable compensation is not simply a percentage of revenue. But a large change in income can be a reason to review the situation.

Why did the income change? Did you work more? Did your hourly rate increase? Did you add another contract?

Those are different situations.

The goal is not to ask: “What is the lowest salary I can get away with?” The goal is to have a salary that is reasonable and supportable for your situation.

THE BIG TAKEAWAY
So remember these four areas: your hours, your duties and responsibilities, your contracts and work setting, and your business income.

You do not necessarily change payroll every time something small happens. But when your business changes in a meaningful way, your reasonable compensation deserves another look.

Because a salary that made sense last year may not make sense this year.

If you already have an S corporation but still wonder whether there are parts of your tax setup you may be missing, that is exactly why we created the 1099 CRNA Tax Checkup.

It walks you through the key areas of your tax system — from payroll and estimated taxes to deductions, travel, retirement planning, multistate issues, and year-end planning.

The goal is not to turn you into a tax expert. It is to help you spot areas that may need attention before they turn into expensive surprises.

You can download the free 1099 CRNA Tax Checkup using the link in the description.

Thanks for listening to Money Moves for CRNAs. New episodes drop twice a month. See you soon.