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Old 03-05-2017, 05:59 AM
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How to pay myself

I have a C corp registered in Wyoming, I own 100% of all the shares. 2015 and 2016 I did not pay myself. But in 2017 I would like to start. What is the best way to pay myself and use it as a deduction? Can the corporation pay my mortgage or car payments, etc?



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Old 03-05-2017, 11:14 AM
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I have a C corp registered in Wyoming, I own 100% of all the shares. 2015 and 2016 I did not pay myself. But in 2017 I would like to start. What is the best way to pay myself and use it as a deduction?======>Yes on your 1120, you as The operator of the C corp may withdraw reasonable salary and thesalary is deducted from the corp's profits. This means that the salaries are not taxed at the corporate level. (Put simply, the issue of double taxation does not exist for salary payments.) In some cases, the entire net profit may be offset by salaries to the owners, so that no corporate income tax is due. and you need to report your salary on W2(your C coprp issues it to you) from the C corp on your 1040 line 7; in general, Corp officers who are involved in the day-to-day running of a business must take a salary and employment taxes must be paid on that salary ;
Generally such payment would be treated as an expense for C-corporation and self-employment income for you.



Can the corporation pay my mortgage or car payments, etc?==========>personal mort or personal car pmts? No; however, if you use the money for business, the interest you pay to get that money is a deductible business expense on your 1120 biz return. Your deduction begins only when you spend the borrowed funds for business purposes. Because interest on money you borrow for personal purposes like buying clothes or taking vacations is not deductible, you should avoid paying this type of interest whenever possible. If you own a business, you can do this by borrowing money to pay your business expense and then using the money your business earns to pay off your personal debt. By doing this, you ?replace? your nondeductible personal interest expense with deductible business expenses.



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