Discussion:SCorp salary to officers
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| Revision as of 23:09, 16 February 2008 Wwtaxes (Talk | contribs) (Not that this is) ← Previous diff |
Revision as of 23:24, 16 February 2008 TxSrv (Talk | contribs) (If no distributi) Next diff → |
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| {{ForumReplyPost|UserID=Wwtaxes|Date=16 February 2008|Text=Not that this is a good idea, but if you are concerned about not paying FICA on the profits, you can consider issuing a 1099 from the S Corp to the client, and not taking expenses against it on the C. I've done this for corps that refuse to do wages, so that they are actually paying FICA, especially if it's not the first year, or if the profits are over 10K. It's not the right way, but it accomplishes paying employment taxes. Of course, they don't qualify for deductions that require wages, but that's their own fault for not paying wages. Having said that, I agree with JR and would let this one slide.}} | {{ForumReplyPost|UserID=Wwtaxes|Date=16 February 2008|Text=Not that this is a good idea, but if you are concerned about not paying FICA on the profits, you can consider issuing a 1099 from the S Corp to the client, and not taking expenses against it on the C. I've done this for corps that refuse to do wages, so that they are actually paying FICA, especially if it's not the first year, or if the profits are over 10K. It's not the right way, but it accomplishes paying employment taxes. Of course, they don't qualify for deductions that require wages, but that's their own fault for not paying wages. Having said that, I agree with JR and would let this one slide.}} | ||
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| + | {{ForumReplyPost|UserID=TxSrv|Date=16 February 2008|Text=If no distributions during 2007, IRS cannot make any assessment of FICA. It's in the statutory language. Therefore, nothing to worry about in this case.}} | ||
Revision as of 23:24, 16 February 2008
Discussion Forum Index --> Advanced Tax Questions --> SCorp salary to officers
Discussion Forum Index --> Tax Questions --> SCorp salary to officers
| 16 February 2008 | |
| I have a client who incorporated a SCorp in oct 2007. He has around $9000 in profits. Is he required to pay himself salary for 2007?
He is going to keep the money in business. Is it ok that he doesn't pay any salary since this was his first year and he incorporated late in the year or is it mandatory to pay himself some salary.? Would you answer be different if it was a loss? Thanks, Vijaya | |
| 16 February 2008 | |
| Not that this is a good idea, but if you are concerned about not paying FICA on the profits, you can consider issuing a 1099 from the S Corp to the client, and not taking expenses against it on the C. I've done this for corps that refuse to do wages, so that they are actually paying FICA, especially if it's not the first year, or if the profits are over 10K. It's not the right way, but it accomplishes paying employment taxes. Of course, they don't qualify for deductions that require wages, but that's their own fault for not paying wages. Having said that, I agree with JR and would let this one slide. | |
| 16 February 2008 | |
| If no distributions during 2007, IRS cannot make any assessment of FICA. It's in the statutory language. Therefore, nothing to worry about in this case. | |
