Discussion:S Corp - Have No Employees - Do I need to pay managers for work?
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Discussion Forum Index --> Tax Questions --> S Corp - Have No Employees - Do I need to pay managers for work?
| 29 March 2006 | |
| I just now noticed that the IRS does not allow S Corps to produce income to shareholders without having employees or paying employees. Seems like they dont want the owners to dodge Social Security taxes or medicare taxes. I wanted to see how I would pay the owners as employees for last years work? What is involved with having employees? And, what do I do if one of the owners already maxed out their social security tax.
Thanks for your help. | |
| 29 March 2006 | |
| Pick a thread, any thread and you'll see that this has been well discussed. Most recent and easy to find is the desperate housewife thread. If your guy is maxed out on SS already, tho', you've got no worries. An advantage in being too late to file W2's and just include on Sch. C (his 'salary' amount).
And IRS allows you to file, but if you've got profit and no officer salary, beware. Thar be dragons. | |
| 29 March 2006 | |
| Appoint owners as employees on W2. For 2005 you can't on W2 now, so it's a gone case now. The dates for W2 and W3 for 2005 are gone. In addition to that there are so many payroll related formalities. Take help of a firm doing payrolls. if sombody maxed out on SS it doesn't matter. I have seen many people switching jobs and finally getting a refund for extra SSpaid. | |
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