Discussion:1099 Misc. To S Corp Shareholder?
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Discussion Forum Index --> Basic Tax Questions --> 1099 Misc. To S Corp Shareholder?
Discussion Forum Index --> Tax Questions --> 1099 Misc. To S Corp Shareholder?
| 23 February 2008 | |
| A shareholder of an S corp. did not have any payroll salary and taxes taken out. He would only cut a check to himself every two or three weeks. Can the S corp. give that shareholder a 1099? | |
RoyDaleOne (talk|edits) said: | 23 February 2008 |
| Why? | |
| 23 February 2008 | |
| Technically, this is not the way to do it. There are lots of discussions about this on this forum, so you should check them out. The correct way to handle this is to submit corrected 941, W2, and any associated state forms (such as UI). Some of the discussions talk about using a 1099 to force FICA taxes, even though this still bypasses FUTA and State UI - it's better than doing nothing, but not the correct treatment.
Something else to consider - if this is the first year of the S Corp, and the profits and therefore the draws, are small, you might let it slide to not have payroll, just for this year. There was a fairly recent discussion about this: http://taxalmanac.com/index.php/Discussion:SCorp_salary_to_officers | |
| 23 February 2008 | |
| His previous accountant didn't tell him anything. This is his 2nd year. I advised him to deduct payroll taxes for 2008 he agreed. I guess it shouldn't be a problem giving him a 1099 for 2007 $33K right? | |
Bottom Line (talk|edits) said: | 24 February 2008 |
| Not the best way to do it but it's probably a better work around than paying the penalties for late filing/paying 941. Remember though, he's not paying into FUTA & SUTA. That's why this should not be done on an ongoing basis. | |
| 24 February 2008 | |
| fast elephants and inquiring kittens are still wondering why why why | |
| 24 February 2008 | |
| why didn't someone know how to do a search? Is their time more valuable than those who answered this question? | |
Death&Taxes (talk|edits) said: | 24 February 2008 |
| It wouldn't be TaxAlmanac if once a month someone didn't ask this question, Kevin. The advertisers eat it up. | |
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