I'd recommend asking your accountant this question, s2c. Is there a particular reason you're considering going from engaging an accountant last year to taking on the business taxes yourself this year? You may also find answers to your questions in the publications available online through the federal and local tax agencies. Hopefully some of our members may have some advice or insights relevant to your situation, but an accountant can consider more aspects and are professionally trained to answer questions like this.
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Hello s2c, If you are the owner of an S-Corporation which is considered one of those pass-through entities, you may not need to start paying in W-2, but you do need to follow the rules of 1099 payments, even as the 'Tax Cuts and Jobs Act of 2017' take effect, in 2018.
We strongly recommend you hire a Certified Public Account (CPA) to review and assist in filing your S-corporations Tax Return. Remember to ask your CPA about Estimated Tax Payments which are due 4 times a year, quarterly, in many circumstances. The I.R.S. suggest all businesses save their tax returns, receipts, statements, invoices and all documents relating to a companies finances for 7 years.
If you want to plan future years tax filings and have an easier time filing by being well organized you could hire an Actuary who handles finances and they can help navigate business expectations and manage risk. You would still use an account for filing the S-Corporations Tax Returns.
If you are operating as an S Corp, for tax purposes you are not a sole proprietor. You are a corporation, and as such, I'm pretty sure you should be paying yourself a salary, and withholding submitting the appropriate payroll taxes and filing a quarterly payroll report. I think you need to talk to your accountant again and make sure they are a CPA (certified public accountant) or enrolled agent. If they are not, and are not qualified to represent you before the IRS, you should find someone who is a CPA or enrolled agent to help you with all the details. I would not suggest doing your corporate taxes yourself. In the long run, it's less expensive to pay a qualified professional to handle your taxes than to do them wrong and possibly later have to pay penalties and fines.
s2c , you've received some great advice from our community. As you can see, the general consensus is that consulting a CPA is most likely the way you need to go. Not only will they be able to answer any questions or concerns regarding your 2017 taxes, but they will be extremely useful in helping you understand the new sweeping tax changes for 2018.
Please let us know if you have any additional questions, or want to provide more information. We're here to help, and would love to hear back from you on your decision.
I am a single owner for my s corp and I pay people that work with me with a 1099. I use different people all the time so I don’t really have employees . My question is, last year the accountant just took te bottom line ( whatever was left after expenses was taken ) and input it in my k1. I usually write myself a check from the business for whatever is left.
Do I need to start doing w2 for myself or it’s okay to just transfer everything that was left to my k1 at the end of thei year. Or maybe do a 1099. my share of work for the business is a 100%