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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16579
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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The first 3 months of this i did not take a salary as president. Should

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The first 3 months of this i did not take a salary as president.

Should I account for this as deferred salaries on the books so that it is a true reflection of company expenditures, paid or unpaid. Since now salary was paid, I suppose there is no tax event for the corporation or personally?

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

Could you give me some background? You mention "for the first three months of this" - what are you referring to?

Customer:

First three months of this year....

Megan C :

You did not take a salary as president during the first three months, but then the corporation made up the payment?

Customer:

NO, I have not been paid for this deferred salary

Megan C :

Will you be in the future?

Customer:

I hope, but unknown timing.

Megan C :

You should accrue it on your books as a deferred salary, yes

Megan C :

debit expense credit deferred salaries

Megan C :

And there's no tax event for you unless the salaries are actually paid.

Customer:

so record as a salary expense but credit deferred salary asset

Megan C :

It's deferred salaries - liability

Megan C :

future expense

Customer:

will this me a salary expense for this year, or only when paid

Megan C :

You incur the expense when you accrue for it. YOu will not owe payroll taxes until paid. You as a person will not be taxed on it until you are actually paid.

Megan C :

Is there anything else you need assistance with?

Customer:

nat at this time thanks

Customer:

not

Megan C :

If you would, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Megan C and 2 other Tax Specialists are ready to help you
Thanks, Randy for your positive rating. Please come back and visit me any time you need a tax question answered. It was a pleasure working with you today