TaxSrv wrote:

- quote -

Actually I should clarify my role a little. Besides being
the President/owner of the small (2 person) C-Corp, I'm the
sole person billing hours to clients currently. So, because
of that, I wouldn't think my salary would be too high (sure
doesn't look high to me). I was just a little concerned
because of that little "your compensation seems a big high
as an officer ..." warning from the tax prep software.

Thanks again.

--Ed

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- quote -

First of all, there is NO typical salary for the president
of a corporation. The salary ios set by the company based
upon various criteria. I know of no tax software program
that can tell anyone that the salary of an officer exceeds
the norm.

Your salary belongs on the officer's compensation line in
full. It makes no matter that you are the only employee.

You may want to get some professional advice on your
company's tax situation before you complete the return.
Seems to me that you probably should.

Bruce Raskin, CPA
Small Business and Individual Tax and Accounting Services

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"Ed" wrote:

- quote -

All officer compensation goes on line 12 for a service
business. If you are providing significant, full-time
services to this corp, and includes rustling up clients as
you imply, any amount you take out of this company will be
difficult for IRS to challenge. What your tax prep software
is telling you about averages is silly, because IRS does not
reference averages in selecting returns for examination
(only a small % are even screened). Rather, they view the
return as a whole and what the company does, and impliedly
what you do, and form a judgment as to whether this
difficult-to-win issue has tax potential if selected for
this line item.

Also, you're unnecessarily restricting what an officer does.
"Bringing in income" is usually the job of one or more
officers in any corporation, and unique talents in this
regard tend to be the very core of an argument to sustain
levels of comp which may appear superficially high.

Fred F.

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"Ed" <eds.no.spam[at]yoggin.com> wrote:

- quote -

I don't know what you use for software so I will ignore it's
"warning". Isn't a more reasonable question "Is your salary
reasonable for what you d?"

- quote -

But you ARE an officer. Officer's salary goes on that line
and only that line.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Background: I'm the President/owner of a small (2 employee)
computer programming C-Corp. I'm currently the sole person
bringing income into the Corp also.

It seems from past postings that when filling out the 1120
all of my salary should be listed under Officer's
Compensation (line 12) instead of the regular salaries/wages
(line 13).

This leads to a couple of questions:

1. Will this cause any red flags since my salary will be
higher than the typical President (at least according to the
tax prep software)? Being the officer is not my main job.
The main one is bringing in income. But, from everything I
have read, if I'm an officer, all of my pay should be on
line 12.

2. Should the Officer's Compensation and Salaries related to
my pay be split across line 12 & 13 since I have two roles
with the Corp?

Thanks in advance.

--
Ed

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