I own a C corporation and paid myself a salary. Am I supposed to issue myself a W2? I did not for 2009 and was wondering how I report the income on my 1040. I am using TaxAct and they have business income from sole proprietorship, partnership and S corp, but I don't see C Corp.
Yes, you do need to issue yourself a w-2 declaring any wages you paid yourself from the company. Which is good for the business, it pays less tax, but means you pay more, and you pay it as ordinary income. I assume you've spoken with an expert to make sure that the C corp is really the best way to go. You may be better off as an S corp, depending on your situation.
Yes, the C corp gives you a W-2. C corps are not flow-through entities. The corp will pay its own taxes. You pay tax on your W-2. Other distributions from a C corp to you is a dividend, not deductible by the corp, but reportable as income by you.
C-corp can have tax advantages. You can have a resolution to have 100% of anything medical for you and your family reimbursed, including vitamins, health clubs, glasses. You can have business trips. You can set up a pension plan. It can pay some life insurance. Read Jay Mitton books, he's the father of asset protection.
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