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5 Replies Last post: Jan 11, 2009 1:22 PM by JulianaNKcpa

S corporation Payroll

Dec 10, 2008 10:48 PM

amahmood 1 posts since
Nov 3, 2008

Hello every one, ti
I opened my s corporation on April 1,2008 and since that I am working CORP TO CORP on IT. However I didnot run any payroll. My fisical year period will ends on December 31. Though I made descent money on company account.

1. My queston is if I am only one employee and owner of s-corp, and not running payroll is a violation.
2. Can I pay myself from my S Corp on 1099
3. I still have some time till December 31st should I run some payroll
4. Please advice your help is really appriciated

thanks

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LUCKIEST 7,933 posts since
Aug 6, 2007

1. Re: S corporation Payroll Dec 11, 2008 7:44 AM

S corporation Payroll, Welcome

You should get some great answers to your questions on this site.

I believe that everyone in business should have an Accountant.

Talk to an accountant NOW. As you said you still have time.

Good luck, LUCKIEST

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lfreeman 35 posts since
Oct 20, 2008

2. Re: S corporation Payroll Dec 11, 2008 9:06 AM

An "S" Corp owners are taxed on the profits/loss of the Corp. Your accountant will prepare the 1120's Federal Corporate Income Tax Return and also the K-1 which reflects the amount of profit or loss you will be claiming as income. If you further quesions I will be happy to answer them for you.

Lynn Freeman

(904) 707-0226

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intechspecial 1,457 posts since
Jan 6, 2008

3. Re: S corporation Payroll Dec 11, 2008 9:23 AM

in response to: lfreeman

Lynn -

There was a gentleman that had called me a while back who needed some assistance with web development.

I have not heard from him, and I have heard him mention you previously via this website.

If you know of me via my repoire here on this site, please forward my inquireies to this gentleman.

Thank you,

Mike Stratton

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TerriMej 2 posts since
Dec 11, 2008

4. Re: S corporation Payroll Dec 11, 2008 1:03 PM

There is an incentive for an S-corp to pay little or no wages to shareholder employees. That's because wages are subject to employment taxes such as FICA and FUTA, while ordinary income passing from an S-corp to shareholders is not subject to employment taxes either at the corporate or the individual level. HOWEVER, the IRS has won a substantial number of cases in court. When the IRS is successful in recharacterizing distributions as wages, the S-corp and the employee are then subject to employment taxes, AS WELL AS PENALTIES AND INTEREST, for underpayment and failing to file employment tax returns.

It is better to avoid the headaches and establish reasonable compensation and run your payroll. It is not that difficult. It you need additional help, you can e-mail me at terri@smallbusinessaides.com

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JulianaNKcpa 17 posts since
Dec 16, 2008

5. Re: S corporation Payroll Jan 11, 2009 1:22 PM

You have received good advice from the others.

As a shareholder you cannot pay yourself as a 1099 contractor.
You can do payroll for your self to stay in compliance.
You can accomplish this easily with QuickBooks.

Find an Accountant to work with to avoid any headaches with the IRS.

Much Success
Juliana

http://www.JNKcpa.com
http://www.TrainingQuickBooks.com

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This Question is Possibly Answered

S corporation Payroll

Dec 10, 2008 10:48 PM

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