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J.K. Lasser's Small Business Taxes 2018 by Barbara Weltman

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CHAPTER 7Employee Compensation: Salary, Wages, and Employee Benefits

According to a 2017 report by the SBA's Office of Advocacy, small businesses employed 57.9 million workers, which is 47.8% of the U.S. workforce. If  you are an employee of someone else's business, you do not pay compensation to another individual. You can skip most of this chapter and go on to look at other deductible expenses. However, you might want to review the areas covered to understand your employer's burdens and responsibilities for the wages and benefits paid to you. You may also be interested in a couple of tax credits to which you may be entitled by virtue of working.

If you are the owner of a sole proprietorship, partnership, or limited liability company, you are not an employee and cannot receive employee compensation. Money you take out of your business is a “draw,” but it is not a deductible expense ...

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