Salary – DougFreemanCPA.com

Making withdrawals from your closely held corporation that aren’t taxed as dividends

Business Loans, Closely Held Corporations, Compensation, Corporations, Debt-to-equity Ratio, Dividend Distribution / Douglas Freeman

Do you want to withdraw cash from your closely held corporation at a minimum tax cost? The simplest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax-efficient since it’s taxable to you to the extent of your corporation’s “earnings and profits.” It’s also not deductible by the corporation. Five alternatives. […]

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Determine a reasonable salary for a corporate business owner

C Corporation, Compensation, Employees, Internal Revenue Service (IRS), Shareholder, Small Business, Stocks / Douglas Freeman

If you’re the owner of an incorporated business, you probably know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason is simple. A corporation can deduct the salaries and bonuses that it pays executives, but not its dividend payments. Therefore, if funds are

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5 ways to withdraw cash from your corporation while avoiding dividend treatment

Closely Held Corporations, Compensation, Income Tax, Small Business, Tax, Tax Planning / Douglas Freeman

Do you want to withdraw cash from your closely held corporation at a low tax cost? The easiest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax-efficient, since it’s taxable to you to the extent of your corporation’s “earnings and profits.” But it’s not deductible by the corporation. Different approaches.

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