Do I have to pay tax on directors fees?

Directors fees received for performing services as a director of a corporation are self employment income if you are not an employee of the company and must be reported on your tax return. It does not matter whether the directors fees are for going to directors meetings or for serving on committees established by the directors. The earnings are taxable in the tax year received and must be reported on your tax return.

Report taxable directors fees income and expenses on Form 1040, Schedule C.

Figure your self-employment tax for directors fees on Form 1040, Schedule SE.

If you earn or receive taxable income during the tax year that is not subject to tax withholding, or if you do not have enough income tax withheld, you may have to pay estimated tax.

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For further information about directors fees see IRS Publication 17, Your Federal Income Tax. Please read this IMPORTANT Editor's Note regarding navigating IRS publications with Adobe Acrobat Reader.
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