(208) 415-1850 contact@cdaaccounting.com
Does a Coeur d’Alene S Corporation Have Flexible Tax Reporting?

Does a Coeur d’Alene S Corporation Have Flexible Tax Reporting?

No. If your business is formed as a Coeur d’Alene S-Corporation, then there is no other taxation option available.

However, the IRS does not have a separate taxation category for Idaho LLCs. This allows the LLC members to elect at their own discretion a form of taxation that makes the most sense for their business. An Idaho LLC can elect to be taxed as an Idaho S-Corporation, but not the other way around.

Coeur d’Alene Business Consignment Rules

Coeur d’Alene Business Consignment Rules

Consigned inventory is merchandising a Coeur d’Alene business or an individual places with another business for the other business to try to sell. A dressmaker may consign inventory to a dress shop. The person consigning the goods (the dressmaker) has not made a sale and does not get paid until the business that has taken the goods in on consignment (the dress shop) sells the goods.

Tax Implications

For tax and inventory purposes, the consignor (in this example, the dressmaker) has not sold the dress. There is no income to report. The dress inventories. The consignee (the dress shop) has not purchased the dress from the dressmaker until it sells the dress to its customer. The dress shop does not include the dress in its yearend inventory.

Does a Coeur d’Alene S Corporation Require a Reasonable Wage?

Does a Coeur d’Alene S Corporation Require a Reasonable Wage?

Yes. Even though a Coeur d’Alene S-Corporation uses a pass-through taxation method, owners/shareholders are able to differentiate between a wage and a disbursement. However, a reasonable wage must be paid out to those working in the business before any disbursements are paid out to other owners/shareholders. This reasonable wage must have been paid on a W-2 with employment taxes paid.

A reasonable wage is best determined by the replacement cost of that position on the open market.

Example

If the Idaho S-Corporation profited $58,000 this year and a reasonable wage is $75,000, then all $58,000 must be paid as the reasonable wage. Until the reasonable wage has been met, no disbursements can be made.