Do you declare salary as a CEO in a C Corp? What happens if you can't pay your own salary?

Once you form a corporation, it is not necessary to hire employees or take a salary because you are a C Corporation.

It is a business decision & it depends on various factors.

Profit-generating years, ensure you take a reasonable salary and promptly pay federal & state taxes.

Loss generating years, -ensure you file zero payroll tax returns as you are not able to take a salary. Otherwise, you may be surprised to find a tax bill that has few estimated calculations based on your prior year payroll taxes paid.

 

*** based on our response posted on quora


Posted In: Tax

Go Back