{"id":703,"date":"2016-08-03T14:50:23","date_gmt":"2016-08-03T14:50:23","guid":{"rendered":"http:\/\/onlyfordentists.com\/blog\/?p=703"},"modified":"2016-08-03T14:50:23","modified_gmt":"2016-08-03T14:50:23","slug":"tax%c2%ad-smart-ways-to-take-cash-out-of-your-corporation","status":"publish","type":"post","link":"https:\/\/onlyfordentists.com\/blog\/2016\/08\/tax%c2%ad-smart-ways-to-take-cash-out-of-your-corporation\/","title":{"rendered":"Tax\u00ad-smart Ways To Take Cash Out of Your Corporation"},"content":{"rendered":"

\"bankruptcy<\/a>Owners of closely held C corporations are often interested in withdrawing profits from their\u00a0companies in ways that minimize taxes. What are the options?<\/p>\n

Pay Salary\/Bonus.<\/strong>
\nIf the owner is a company employee, taking more salary or a year\u00adend bonus is\u00a0an option, as long as the total amount of compensation the owner receives is reasonable. The\u00a0company deducts the payments as a business expense; the owner is taxed on the money. The \u201ccost\u201d\u00a0of this option depends on the corporation\u2019s and the owner\u2019s tax rates. Payroll taxes are an added expense.<\/p>\n

Pay Family Members.<\/strong>
\nReasonable amounts paid to an owner\u2019s family members for services\u00a0actually rendered to the company are deductible by the corporation and are taxable at the family\u00a0members\u2019 own tax rates. Often, these rates are much lower than theowner\u2019s.\u00a0Pay a Dividend. Dividends the company pays out will, in effect, be taxed twice \u2014 once at the\u00a0corporate level (dividends are nondeductible) and once to the owner personally. No payroll taxes\u00a0will be due. With the individual tax rate on qualifying dividends currently capped at 20% for\u00a0taxpayers in the 39.6% regular bracket (and 15% for most other taxpayers), this option may have\u00a0more appeal.<\/p>\n

Utilize Fringe Benefits.<\/strong>
\nCertain fringe benefits are deductible by the corporation but not\u00a0includible in the owner\u2019s gross income. Examples include qualifying group life insurance, health\u00a0care benefits, and disability insurance. (Most fringes must be provided on a nondiscriminatory\u00a0basis to other company employees.) To the extent an owner is paying for these items individually,\u00a0having the company pay for them increases the cash available to the owner.<\/p>\n

Take a Loan.
\n<\/strong>If an owner borrows money from the corporation, the owner is not taxed on the loan\u00a0amount. The loan must be a legitimate debt, with proper documentation and timely interest and\u00a0principal payments.<\/p>\n

Lease Assets to the Company.<\/strong>
\nAn owner might consider leasing property to the corporation. The\u00a0company deducts the lease payments; the owner includes the amounts received in income and\u00a0deducts expenses associated with the rental activity.<\/p>\n","protected":false},"excerpt":{"rendered":"

Owners of closely held C corporations are often interested in withdrawing profits from their\u00a0companies in ways that minimize taxes. What are the options? Pay Salary\/Bonus. If the owner is a company employee, taking more salary or a year\u00adend bonus is\u00a0an option, as long as the total amount of compensation the owner receives is reasonable. The\u00a0company […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-703","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-uncategorized","7":"entry"},"_links":{"self":[{"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/posts\/703","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/comments?post=703"}],"version-history":[{"count":1,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/posts\/703\/revisions"}],"predecessor-version":[{"id":704,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/posts\/703\/revisions\/704"}],"wp:attachment":[{"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/media?parent=703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/categories?post=703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/onlyfordentists.com\/blog\/wp-json\/wp\/v2\/tags?post=703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}