Question

The taxpayer is the sole owner employee of a small corporation that prepares tax returns. Before paying himself any salary or dividends or taking fringe benefits, the corporation has taxable income of $ 100,000. Summarize the tax consequences to both parties (the corporation and the taxpayer) of:
a. Paying a salary of $ 50,000.
b. Paying no salary but dividends of $ 50,000.
c. Providing $ 10,000 of fringe benefits and $ 40,000 of salary.


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  • CreatedAugust 06, 2015
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