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Stephen G.
Stephen G., Sr Financial Expert
Category: Finance
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Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I founded & own a c corporation in Wyoming and I have a

Customer Question

Hello, I founded & own a c corporation in Wyoming and I have a question: - I am the founder & president, there are no other employees or people working for me. Can I NOT give myself a salary? At this point in time I just want to grow the business but I'm
not sure if I'm obligated to give myself a salary or not. If it makes a difference, I'm a resident of the state of Hawaii.
Submitted: 12 months ago.
Category: Finance
Expert:  Stephen G. replied 12 months ago.

If the Company can not afford to pay you a salary at this time, you don't need to pay yourself a salary. What you don't want to do is to try to take money out of the corporation as an independent contractor (1099). You may use this time to build equity in the Corporation and it would be considered at the time the Company can afford to pay you as a reason that your salary would be considered reasonable (ie. that you were not previously adequately compensated).

Customer: replied 12 months ago.
I see. I'm concerned that the company currently generates high 5 figures per month in profit.In this case, can I still not pay myself any salary?
Expert:  Stephen G. replied 12 months ago.

Well, off course that figure is all relative to the nature & activity that is taking place.

In the case of a "C" corporation, if you are generating that amount of net profit, then you will be paying income taxes at the corporate level far in excess of what you would be paying if you were operating as an S-Corp and trying to take money out as S-Corp distributions verses taking a salary.

You need to give me some additional detail for me to be able to give you any additional guidance.

1. What type of business are you involved in, how long has it been in business and is the revenue based upon your personal services or does your company sell a tangible or intangible product such as software?

2. What type of working capital does the company require and what do your current assets consist of? How much are you carrying in Cash, Accounts Receivable, & Inventory.

3. How do you plan to extract funds from the corporation?

What else do you consider important in terms of the company's ability to generate revenue/profit?

Expert:  Stephen G. replied 12 months ago.

Just checking in to see if you've had a chance to review my latest response & to see if you have any additional follow-up questions? If you do, please ask & I'll respond as soon as I can (I may be helping someone else);

If not, please remember to rate my response as that is the only way we receive credit for our work.

Steve G.

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