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    8 Replies Latest reply on Feb 9, 2010 10:01 AM by GA.CPA

    Need assistance

    TOOKIE Newbie
      I have an S corp and my accountant guy has been paying me with just a K1 and said I did not have to do a 1099 or w2. I am finding out on this site a lot of new info and I see now that for the last two years it has been wrong. So now I want to ask. How do I go about setting up payroll to have deductions taken out for mine and my husbands wages. We really don't make a lot and by the time all the deductions are made we get a K1 for about 5600 each for the year. Any suggesstions? We want to get this done right but don't know where to start.

      This will be our second year of filing taxes.

      Thanks for any help.
        • Re: Need assistance
          geobiz Wayfarer
          I don't know how much help I'll be but I'll try. I have my accountant prepare my quarterly taxes, they send me the completed forms an I pay it. FYI: I am a resident of IL so you may need to check your own states requirements. I pay: Form 941/Employer's Qtr Federal Tax Return (social security & medicare, Form 940/Employer's Annual Federal Unemployment Tax Return, Form (IL-941)/Qtr withholding Income Tax Return, as well as Form UI-3/40 / IL Employer's Qtr Contribution/Wage Report. Form 940 I pay online at eftps.gov. I hope that helps. I would suggest getting a new accountant. I dont know what the going rate is to have an accountant prepare the quarterly taxes but I pay only $25.00 a month.
            • Re: Need assistance
              TOOKIE Newbie
              Thank you for the info but do you think it would be a problem starting two years later with the wages? Since it states that we had to register the employees 15 days into it?

              Also, for the this year can a W2 be made for us two without taking out the FICA taxes? Or should we just do a 1099 for now and then start in 2010 with w'2's?

              Any advise is greatly appreciated.
                • Re: Need assistance
                  GA.CPA Newbie

                  I'm a CPA and I would recommend for this year that you stick with a K-1 largely because the dollar amount is not that large. As an S Corp you are required to pay yourself a "reasonable compensation". However, reasonable is subject to the ability of the business to pay a reasonable salary. I would begin paying wages this year. It is not a problem that you have been in business two years without doing so. I'm curious as to what you are referring to when you state you had to register the employees within 15 days.

                  You can't do a 1099 because you cannot be an independent contractor if you are a shareholder in an S Corp. You can still do a W-2 for 2009 but you would have to submit FICA taxes for both employee and employer.

                    • Re: Need assistance
                      TOOKIE Newbie
                      Thank you for your input. I notice on the CA state site that it states we need to register each employee within 15 days. But if you are recommending that I stick with the K-1 for now then that would not apply.
                      So for me to start with paying the FICA taxes would you recommend a software that can easily do this or would you prefer that I use a CPA? If so, are you available to do CA accounts ?
                • Re: Need assistance
                  alytus Scout
                  hello, the H&R block website is helpfull, and easy to navigate thro