Director's Fees

[dmb]

A prospective client receives director's fees from a company that he no longer works for. It is my understanding that he should be treated as a sole proprietor and not an employee of the company and his income be treated as Schedule C income subject to SETD, etc. Can someone confirm or advise on this matter??

Thanks.

[Appleby]

Sounds like he would be an “outside director” which would mean that he is eligible to use the fee’s and fund an employer sponsored plan. Revenue Ruling 68-595 provides that “Fees nd other remuneration received by a director of a corporation for services performed on committees of its board of directors are self-employment income”