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  1. #1
    Join Date
    Apr 2019
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    1

    Default Payment for Services to a Business Owner

    My question involves business law in the state of: Texas

    i am a owner of a c-corp 100% and s-corp 50% owner. can i invoice the s-corp for admin services instead of being on payroll of the s-corp and receive payroll in the c-corp?

  2. #2
    Join Date
    Oct 2014
    Posts
    7,087

    Default Re: C-Corp 100% and S-Corp 50% Same Owner, Invoice

    Quote Quoting MichaelSR
    View Post
    My question involves business law in the state of: Texas

    i am a owner of a c-corp 100% and s-corp 50% owner. can i invoice the s-corp for admin services instead of being on payroll of the s-corp and receive payroll in the c-corp?
    That depends on the exact relationship between the two entities. If the C-corporation is in the business of providing those kinds of administrative services and the fees charged are reasonable then the IRS may allow the S-corporation to take a deduction for the fees paid for those services, but then the C-corporation would have to include those fees as income on its return. As the person providing those services you will have to get paid a reasonable wage/salary from one of the two companies at some point. So if the services are provided by the C-corporation then the C-corporation needs to pay you a wage/salary for the work you do providing the administrative services. You might want to have the arrangement reviewed by a tax attorney. These kinds of arrangements can be used for abuse of the tax system, and if the IRS determines there is abuse that could be costly to you So make sure you get it right.

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