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Is a bonus deductible on a tax return if paid in the following year for a C Corp?

For a C Corporation (C Corp), the company can deduct the bonus payment as long as the payment is made within 2.5 months from the company’s taxable year-end. The one exception is that if the bonus is for a shareholder, then the deduction would apply to the year that the bonus payment is made during.

Assuming a tax year-end date of December 31st, the corporation would be able to deduct bonuses for the Year 1 tax return as long as they are paid by March 15th, Year 2:

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