Discussion Archives:C-corp and accrue salaries question

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Discussion Forum Index --> Advanced Tax Questions --> C-corp and accrue salaries question


Discussion Forum Index --> Tax Questions --> C-corp and accrue salaries question

TaxAlias (talk|edits) said:

30 December 2009
I have a c-corp. The shareholders are the employees of the company. The c-corp accrues salaries but the salaries are not paid for 2009. I'm a little bit confused about the payroll taxes. If the company accrues salaries and gets a tax deduction for 2009. Are the payroll taxes due in 2009? or are the payroll taxes due when the company actually pays the salaries? thanks in advance.

TaxAlias (talk|edits) said:

30 December 2009
I'm answering my own question again. Payroll taxes are due when salaries are paid. I guess my real question is more about any issues I should be aware when a c-corp accrues salaries for the year but does not paid the salaries to their shareholders/employees. Would this raise a red flag with irs? thanks

DaveFogel (talk|edits) said:

31 December 2009
Does Sec. 267(a)(2) prevent the C corp. from taking a deduction for the accrued salaries payable to the shareholders?

TaxAlias (talk|edits) said:

31 December 2009
Thanks Dovefogel! My interpretation of sec267(a)(2) is that the deduction is allowed when the amount of the deduction is included in the gross income of the related person (in this case the shareholder/employee.
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