Compensation of Husband and Wife in a Partnership

This is a question we received from one of our readers through our Consult Your Guides:

I'm staying in VA. Recently I've started a new firm (S Corp) and working as a contractor in DC through my firm. I'm the only one working for the company. My wife is partner in the company, but she is permanent employee of some other firm. Estimated revenue of my company is around 120K/yr. What salary/compensation should I draw for myself? As my wife is a partner, is it mandatory to pay salary/compensation for her? - Prashant

Read our Guides' response