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Be Careful When Giving Yourself Bonuses

Whoa, there, big spender: Make sure your big bonus is kosher with the IRS.

Opinions expressed by Entrepreneur contributors are their own.

When the profits are flowing in, it's often tempting to give yourself a nice, big at the end of the quarter. But you'd better keep your at bay if you're organized as a regular corporation: The is going after those owners who pay themselves too much.

To decide whether is reasonable, the IRS looks at a number of factors. These include the and size of the business, the nature and scope of the work the owner does at the , the amount of time required for the services, and any special qualifications the owner has. surveys and third-party studies help determine what is considered reasonable compensation for companies in the industry.

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