J.K. Lasser's Small Business Taxes 2018

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

1. Worker Classification
2. Temporary Workers and Outsourced HR
3. Deductible Employee Compensation
4. Compensation to Owners
5. Stock Options and Restricted Stock
6. Deferred Compensation
7. Disallowance Repayment Agreements
8. Employee Benefits
9. Golden Parachute Payments
10. Cafeteria Plans
11. Employment Tax Credits

Alert

At the time this book was completed, Congress was considering important tax changes that could affect 2017 tax returns and planning for 2018. Check the online Supplement in February 2018 at www.jklasser.com or www.barbaraweltman.com to see what changes have been enacted and when they are effective.

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 ...