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Salary Vs. Guaranteed Payments

Corporate Law Discussions

Salary Vs. Guaranteed Payments

Postby vanaken25 » Sun Dec 04, 2016 2:23 pm

s About Taxes)/Salary vs. Guaranteed Payments Advertisement Expert: John Kirk, CPA - 11/22/2008 Our business is an LLC with one owner actively participating.  The other two owners are receiving a "Salary" but do not actively participate in the business.  I want to know what is the decision criteria for determining payments are salary or really guaranteed payments.

ANSWER: It has to be designated in the membership agreement.

John Kirk, CPA

www.johnkirkcpa.com

---------- FOLLOW-UP ----------

I understand that it must be stated in the members agreement, but we are paying family members a salary who perform no services for the company.  How do I classify the salary and wages paid to those family members?
vanaken25
 
Posts: 39
Joined: Thu Mar 31, 2011 9:37 pm

Salary Vs. Guaranteed Payments

Postby Vsnderveer » Mon Dec 05, 2016 7:03 pm

Salary paid to a partner is considered a guaranteed payment which is excluded from income and payroll tax withholding, but is subject to self employment tax.  You would record those salaries the same as guaranteed payments.

John Kirk, CPA

www.johnkirkcpa.com
Vsnderveer
 
Posts: 48
Joined: Sat Jan 18, 2014 1:36 pm

Salary Vs. Guaranteed Payments

Postby Concetto » Fri Dec 09, 2016 1:16 pm

s About Taxes)/Salary vs. Guaranteed Payments Advertisement Expert: John Kirk, CPA - 11/22/2008 Our business is an LLC with one owner actively participating.  The other two owners are receiving a "Salary" but do not actively participate in the business.  I want to know what is the decision criteria for determining payments are salary or really guaranteed payments.

ANSWER: It has to be designated in the membership agreement.

John Kirk, CPA

www.johnkirkcpa.com

---------- FOLLOW-UP ----------

I understand that it must be stated in the members agreement, but we are paying family members a salary who perform no services for the company.  How do I classify the salary and wages paid to those family members?
Concetto
 
Posts: 40
Joined: Thu Feb 20, 2014 10:42 am


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