Will I get audited because I did not pay myself a salary in first year of startup?

[user45621]

Formed a new startup company last year in DE, but operating in CA as foreign entity. The "Company" issued me 7,500,000 shares of restricted stock with par value of $0.0001 at time of incorporating in return for $750 (investment capital). A total of 10,000,000  shares are available for issue. There are no employees except myself (owner). I did not pay myself any salary and the company made zero dollars. However, I did continue to develop my idea which is a new website. I have some minor startup costs associated with the usual incorporating fees and such.

Using TT Business, I filled out the information to file business taxes and it states: A major audit risk for corporations is salaries not being paid to officers of the corporation.

Should I have paid myself a nominal salary (such as $100 for the entire year) no matter what? Even if I didn't want to pay myself anything because the company made no money? I don't want to get audited for not paying myself.

[ChelsiE2 · Accepted solution]

Not paying yourself a salary is only an issue if you are compensated in another way.  For example, if you do the "work" for the company and take a distribution or receive dividends but do not take a salary, the IRS can reclassify these amounts as wages and make you pay the applicable taxes on them.

However, if you have zero income, then no.  You are not at risk of being audited for not paying yourself a salary.