Starting a Small Business/C corp loans and construction/sub-contractors
I am part owner of a c corp. My first question is how to loan myself money from the c corp to myself and avoid tax penalties. I know I can do it with proper documentation and it would be less than 10,000, but do I have to re-pay the corp back? I know that there has to be a repayment schedule, but is that just to please the IRS or do I actually have to pay the corp back? My second question is, I am in the electrical field, so most of the time I am a sub-contractor. On my smaller 10,000 dollar jobs if a general contractor pays me, say in my name, not the companies, could I just go and cash that check without worrying about tax issues or is the IRS going to know that I have that money given to me from the general contractor?
Robin: Thank you for contacting me via AllExperts. I have been a volunteer on this site for probably some 6 years now and i look forward every day to new questions. That being said I am going to do a bit of research on my end into your C Corp loan question. My e-mail address is firstname.lastname@example.org Please send me an e-mail so I can respond directly to you on that question.
The IRS WILL DEFINITELY KNOW that you PERSONALLY received payments with checks made out in YOUR NAME !!!!!!!! Why??? The general Contractor, sometimes referred to as the GC, will ask you for your name, address and Social Security number. At the end of the year he will send you what is referred to as a 1099 IRS form indicating the total amount paid to you by him.