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The IRS will, effectively, value your job in the event of an audit and determine whether you paid yourself reasonably compared to your market for your skills, e
by stirno 13y ago
The IRS will, effectively, value your job in the event of an audit and determine whether you paid yourself reasonably compared to your market for your skills, experience, etc.
I had prepared an example that showed you could actually pay less in FICA, while still being reasonable in the eyes of the IRS. Maybe not ideal to post it here though.
- a8da6b0c91d 13y agoHow do those CEOs with $1 salaries get the all clear? Their compensation is all capital gains, yeah?
- Romoku 13y agoLong term capital gains is less than the alternative minimum tax. Executive compensation probably consists of a mixture between stock options and company paid expenses (airfare, company car, vacations, travel, nice office equipment, etc).
- lmm 13y agoMaybe the IRS determines that's the market rate for their skills :P
- derekp7 13y agoIf the majority of CEOs do this, then that is the typical compensation of CEOs. So they get away with it because they all do it.
- TheEzEzz 13y agoI believe this only applies to S-corps, in order to prevent abuse of the pass-through taxation S-corps enjoy. IANAA though.