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Officer Pay for LLC

Posted by ejflemng on 06/17/2009 - 11:16

What issues are involved with owner officers receiving a salary with deductions in an LLC?

Edward Fleming

  • 1887 reads


S-Corp

Assuming it's a partnership it should be a guaranteed payment and not salary.  If it has elected to be an S-Corp then compensation has to be reasonable.

Chandler AZ CPA

Posted by Anonymous on 06/15/2010 - 22:20

Officer Pay for LLC

I assume this is an LLC not electing to be treated as a corp. As an LLC owners cannot be paid salary but instead guaranteed payment and (or) their share of the company distributive income. The issue will be on calculating the partner's basis if they are paid salary. If it's not too late, I'd suggest to reclassify the payroll to owner's draw and get a refund by filing the amended quarterly return. Then, setup a quarterly estimated tax payment.

Posted by fsuandi on 06/22/2009 - 00:07
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