While I was digging around in incorporating advice books, I ran across some commentary about this. It seems that if you attempt to claim only income from your stock (assuming your stock pays dividends to you ) which is taxed less than wages or salary, the IRS will arbitrarily consider a specific percentage of it to be "salary" for tax purposes to raise your tax liability. Now, this is focused on small corporations, not public ones, where you as the majority stockholder, have the ability to choose how to "pay" yourself. I believe it applies to S corp and other small and privately held corporations with "working" or actively engaged in the business stockholders.
Doing so ( paying yourself only dividends) will result in things like audits and a lot of scrutiny of your operation and personal tax issues from the IRS, too. But since the founders of Google cannot set their own wages and that is governed by a board of directors of a public corporation, they don't face quite the same set of circumstances. Frankly, as businessmen, we should lobby for the abolition of the IRS and income taxes. While I doubt Uncle Sam's appetite for money will go away, I've read that the cost of compliance with IRS rules and regs is often significant for businesses..., and as far as large corporations go, it's usually MORE than the taxes they pay. That, and that the way we buy and sell and conduct our business is influenced far too much by tax issues. Something that gets the IRS out of our accountant's business and lets us focus purely on business as business would be better. +++++++++++++++++++++++++++++++ neofast.net - fast internet for North East Oregon and South East Washington email me at mark at neofast dot net 541-969-8200 Direct commercial inquiries to purchasing at neofast dot net ----- Original Message ----- From: "John Scrivner" <[EMAIL PROTECTED]> To: "WISPA General List" <[email protected]> Sent: Sunday, December 17, 2006 9:03 AM Subject: Re: [WISPA] salary > I do not think any WISPs here really know the answer to this. What is > needed is an answer from an accountant. If anyone on here is a CPA and > can share what the rules are I would be glad to see them. I do not > believe that simply drawing profits from a S corp WISP as opposed to > taking a salary is tax evasion. In a S corp you pay taxes for profits > same as you do for payroll. Where you might have a problem is with > unemployment insurance, social security, workmans comp, etc. Those are > based on payroll. Profits are not in the calculation. Essentially you > are dodging those when you do not take a salary. > Scriv > > > > Charles Wu wrote: > > ><snip> > >Zero. When the CEO is also the primary investor, and the company is an > >S-corp or LLC, why pay payroll tax, when you can just take a repayment of > >loan? > >The salary of the CEO can be meaningless unless also disclosed wether they > >have an equity position or not, and of what caliber. > ></snip> > > > >B/c when you get audited by the IRS (which for any small business, is just a > >matter of time), you will FINED for tax evasion... > > > >-Charles > > > >------------------------------------------- > >WiNOG Wireless Roadshows > >Coming to a City Near You > >http://www.winog.com > > > > > > > >-----Original Message----- > >From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On > >Behalf Of Tom DeReggi > >Sent: Friday, December 15, 2006 1:51 AM > >To: WISPA General List > >Subject: Re: [WISPA] salary > > > > > > > >Tom DeReggi > >RapidDSL & Wireless, Inc > >IntAirNet- Fixed Wireless Broadband > > > > > >----- Original Message ----- > >From: "Travis Johnson" <[EMAIL PROTECTED]> > >To: "WISPA General List" <[email protected]> > >Sent: Thursday, December 14, 2006 8:55 PM > >Subject: [WISPA] salary > > > > > > > > > >>Hi, > >> > >>Just taking a quick survey... answer if you can, but be honest... ;) > >> > >>What is the salary of the CEO of your ISP? Even if you can share the > >>percentage of that salary compared to annual gross revenue... > >> > >>Travis > >>Microserv > >>-- > >>WISPA Wireless List: [email protected] > >> > >>Subscribe/Unsubscribe: > >>http://lists.wispa.org/mailman/listinfo/wireless > >> > >>Archives: http://lists.wispa.org/pipermail/wireless/ > >> > >> > > > > > > > -- > WISPA Wireless List: [email protected] > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ -- WISPA Wireless List: [email protected] Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
