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C Corp Payments To Officers

Corporate Law Discussions

C Corp Payments To Officers

Postby Eadgar » Tue Nov 29, 2016 8:22 pm

s About Taxes)/C Corp payments to officers Advertisement Expert: Randall Klein, MBA, EA - 2/16/2011 Can officers of a C Corp be paid commissions through 1099's.  This is a Commercial Real Estate Corporation with no payroll.  Everyone is commission, including the two officers.  Some additional funds are paid out and are reported through 1099-Div.
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C Corp Payments To Officers

Postby Braeden » Thu Dec 01, 2016 11:39 pm

CAN it be done or SHOULD it be done are two different questions.

First off, who would own a corporation with NOBODY working on the business? That makes no sense. There has to be at least ONE person RUNNING the business, and if only one, that's gotta be an officer. That being said, if the officers are working on the company business activities(and if they are getting money from real estate activities it sounds like they are), then THEY ARE EMPLOYEES, by description. Employees are not supposed to get 1099-MISC statements, just W-2's. If the officers are getting 1099's and not W-2's it does not, taxwise, benefit either the officers nor the corporation. The corporation has fewer expenses(and more taxable income) and the employees have to pay more at tax time themselves. Why would you want to do that???

It sounds like somebody set up a corporation without thinking about tax consequences. There are only TWO reasons to establish a separate entity in the first place: TAX PROTECTION and LEGAL PROTECTION. The action of setting up a corporation is insufficient tax protection in itself; you must have a plan on how to use the corporation as a tax-saving tool on an ongoing basis. You have to be careful as to the dividends situation too, because it is effectively double-taxation(the corporation is taxed then the dividends are taxed at the individual level). It is recommended that you find a tax advisor that is pro-active as opposed to the majority which are "reactive".  
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C Corp Payments To Officers

Postby Leal » Fri Dec 09, 2016 3:49 am

s About Taxes)/C Corp payments to officers Advertisement Expert: Randall Klein, MBA, EA - 2/16/2011 Can officers of a C Corp be paid commissions through 1099's.  This is a Commercial Real Estate Corporation with no payroll.  Everyone is commission, including the two officers.  Some additional funds are paid out and are reported through 1099-Div.
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