I've always wondered what the proper criteria for "reasonable salary" were. Care to offer one of your wonderful Hacker News summaries on that matter?
By the way, it's great to see a qualified member of the HN community offering help to Etymonline. Do let us know if anything comes of it (he's says he's made contact with a local tax lawyer, but based on your reputation here, I'd rest easier if he were in your hands ;-).
Thanks pw, I've read his update on the situation and I've offered to help guide him through the decision of whether to incorporate his website as a business or as a non-profit as well as help actually incorporate his website.
I've yet to hear back from him, so I haven't had anything to update. I'm guessing that he feels comfortable with the information he learned from the tax attorney and is satisfied with the help he's received.
In regards to the "reasonable salary" issue that's a difficult topic to explain because its a subjective test. The word reasonable is going to be very different for the IRS compared to the average taxpayer.
In my experience, a "reasonable salary" is going to depend a number of factors. The best way to prove that you're getting a reasonable salary is to have "comps" or comparable positions with the same functions and them take the average of their salary.
Ex: Your job description is an entry level developer. Average salary is in the range of 55k to 75k but the mean is 60k. In this situation you could argue for any salary between 55k and 75k, but the clearest answer would've been 60k. Subjectivity please a big role in this area.
Also, experience has given me a "gut feeling" on what is reasonable so often times I go by just guessing based on what I've seen on the past.
Lastly, thanks for the props! I'm honestly surprised that anyone even bothers to read my posts about boring tax loll but I'm glad to have been of help =D.
By the way, it's great to see a qualified member of the HN community offering help to Etymonline. Do let us know if anything comes of it (he's says he's made contact with a local tax lawyer, but based on your reputation here, I'd rest easier if he were in your hands ;-).