There are limits to how much money you can take out of the corporation tax this way. Under tax law, compensation can be deducted only to the extent that its reasonable. Any unreasonable portion isnt deductible and, if paid to a shareholder, may be taxed as if it were a dividend. Keep in mind that the IRS is generally more interested in unreasonable compensation payments made to someone related to a corporation, such as a shareholder-employee or a member of a shareholders family.