We have a small company, 2 people so far. Apparently the IRS requires the company to compensate officers and/or shareholders.
What if we didn't? 2020 has already passed. Is it too late to take a wage or other form of payment? Or can we just file indicating that we didn't pay the officers/owner?
@THBella there is no requirement to pay wages / compensation -- what is required is that any payments made ( wages / officers' honorarium etc. ) meet usual for the industry . What they are trying to do is make sure that you are not paying low in wages but paying in other ways that is not subject FICA or some other taxes. So if the entity did not pay any wages/compensation , because cannot afford or other reason but not as a means of avoiding/evading taxation-- then there is nothing to worry about and is quite legitimate. Just report that you did not pay any wages to the two owners ( therefore entity had more taxable income) --- make sure that any and all compensation -- in cash or in kind direct / indirect -- is recognized..
is there more I can do you ?