A law practice was incorporated on January 1, 2019, and expects to earn $25,000 per month before deducting attorney Shonda’s salary. Shonda owns 100% of the stock in the practice. The corporation and Shonda both use the cash method of accounting. The corporation does not need to retain any of the earnings in the business; thus, the salary of Shonda (a calendar year taxpayer) is the corporation’s net income before salary expense.

If the corporation could choose any tax year and pay Shonda’s salary at the time that would be most tax efficient (but at least once every 12 months), what tax year should the corporation choose? When should the salary be paid each year? Be specific.