© 2015 American Institute of CPAs - All Rights Reserved. Reprinted with permission from the June 2015 issue of Journal of Accountancy. Find out what entries on Form 1120S may trigger these audits. By Stephen D. Kirkland, CPA, CMC, CFF Since compensation is subject to employment taxes (including Federal Insurance Contributions Act taxes) and distributions…
Read more
Which Types of Compensation are Considered?
The reference in Internal Revenue Code § 162(a)(1) to “other compensation” includes all current and deferred compensation. Deferred compensation includes employer contributions to qualified retirement plans and non-qualified deferred compensation arrangements. The current value of any equity-based compensation, such as stock options, is also considered. The costs of welfare benefits and fringe benefits are also…
Read more
How do Long-Term Incentives affect Executive Compensation Amounts?
Appreciation in a company’s stock value can be one reason that executive compensation amounts appear to be so high. Publicly-traded companies are required by the Securities and Exchange Commission ("SEC") to disclose how much their top executives were paid the prior year. Companies usually publish this data in the proxy that is sent to shareholders soon…
Read more
Limit on Deductions for Executive Compensation at Public Companies
By Stephen Kirkland This article was published y NACVA in QuickRead on July 11, 2019. The Tax Cuts and Jobs Act (TCJA) made important changes to Section 162(m) of the Internal Revenue Code. That section limits a publicly held corporation’s tax deduction for compensation paid to each covered employee to a maximum of $1,000,000 per year.…
Read more
Recent Comments