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https://www.justanswer.com/tax/5eyvs-1120s-compensation-officers-salary-does.html#:~:text=Officers%20compensation%20for%20the%20S%20corporation%20is%20the,discussed%20above%29%20on%20the%20individual%20shareholder%20tax%20return.
https://www.irs.gov/pub/irs-news/fs-08-25.pdf
Generally, an officer of a corporation is an employee of the corporation. The fact that an officer is also a shareholder does not change the requirement that payments to the corporate officer be treated as wages. Courts have consistently held that S corporation officer/shareholders who provide more than minor services to their corporation and receive or are entitled to receive …
https://www.thebalancesmb.com/what-is-a-reasonable-salary-for-an-s-corporation-officer-397939
The IRS requires that distributions and other payments by an S corporation to a corporate officer must be treated as wages "to the extent the amounts are reasonable compensation for services rendered to the corporation." This means the employee's wages must be reasonable compensation, not cash distributions, payments of personal expenses, or loans.
https://lnktax.com/reasonable-compensation-for-s-corporation-officers/
Under IRS rules, S corporation officers are treated as employees for tax purposes. This means that an S corporation must pay reasonable compensation to its officers in exchange for the services they provide instead of simply treating payments as distributions. The IRS closely looks at the compensation paid to S corporation officers and the distributions they …
https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-employees-shareholders-and-corporate-officers
When corporate officers perform a service for the corporation and receive or are entitled to payments, those payments are considered wages. The fact that an officer is also a shareholder does not change this requirement. Such payments to the corporate officer are treated as wages. Courts have consistently held S corporation officers/shareholders who provide more …
https://www.aicpa.org/resources/article/s-corporation-reasonable-compensation
Ensuring that an S corporation pays reasonable compensation to a shareholder-employee in exchange for services provided by the shareholder-employee is important in protecting both from assessments of tax, penalties, and interest. S corporation shareholders must include in income their pro rata share of the S corporation’s earnings for the year.
https://www.upcounsel.com/reasonable-compensation-s-corp
The officers would rather receive compensation as an investor rather than get paid a worker's salary. Why? Because it affects their take-home revenue. S Corporation Shareholder Compensation If you are an S corporation shareholders, you may enjoy dividends. If you receive your profits as compensation, you are subject to payroll taxes.
https://amynorthardcpa.com/s-corporation-reasonable-compensation/
For 2020, the wage base limit is $137,700. This means that social security taxes will only be taken out on income up to that amount. For this reason, many think it’s reasonable for an S Corporation to pay this amount in shareholder wages. This rule of thumb does reportedly work well for those whose company profits are higher than this amount.
https://businessecon.org/owner-compensation-in-an-s-corporation/
Owner Compensation in an S-Corporation. One of the tax attributes of an S-Corporation over other forms of tax entities is the ability to reduce the overall tax obligation. Naturally the lower the overall tax requirement the more profit generated for the owner (s). The S-Corporation allows an owner to reduce their tax responsibility via the compensation package …
https://ttlc.intuit.com/community/taxes/discussion/how-report-officer-s-compensation/00/468811
Officer and Shareholder compensation is added by going to: Federal Taxes Deductions Compensation and Benefits Salaries and Wages The first screen after clicking on Salaries and Wages is the entry screen for Officers and Shareholders. Distributions to the Shareholder are entered in the "Shareholder Information" section.
https://www.nnoa-camppendleton.org/officer/what-is-officer-compensation-for-c-corporation-question.html
When corporate officers perform services for the corporation, and receive or are entitled to receive payments, their compensation is generally considered wages. Subchapter S corporations should treat payments for services to officers as wages and not as distributions of cash and property or loans to shareholders.
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