To be deductible, employee compensation must be for services actually performed by the employee and the amount must be reasonable.

Question

Quizplus · Accepted Answer

This is a true statement. For employee compensation to be deductible, it must be for services actually performed by the employee and the amount must be reasonable. This means that the employee must have actually worked and provided services to the business, and the amount paid to the employee must be a reasonable and customary amount for the services provided. If the compensation is not for services actually performed or is deemed excessive, it may not be deductible as a business expense.

To Be Deductible, Employee Compensation Must Be for Services Actually