Discussion:S Corp Officers no payroll
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| Revision as of 21:11, 11 October 2009 Kevinh5 (Talk | contribs) (I don't think th) ← Previous diff |
Revision as of 21:29, 11 October 2009 Jokadah (Talk | contribs) (Correct Kevin th) Next diff → |
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| {{ForumReplyPost|UserID=Kevinh5|Date=11 October 2009|Text=I don't think the 650K relates to net income if they only took 25K in draws. I think the 650K is gross 1120-S income OR (maybe) the 1040 income.}} | {{ForumReplyPost|UserID=Kevinh5|Date=11 October 2009|Text=I don't think the 650K relates to net income if they only took 25K in draws. I think the 650K is gross 1120-S income OR (maybe) the 1040 income.}} | ||
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| + | {{ForumReplyPost|UserID=Jokadah|Date=11 October 2009|Text=Correct Kevin the $650K is not net, 2008 was a really bad year, in fact they have a loss for the 1120-S. They got jobs the last quarter which is when they took 18K each. They could not afford to pay me so they stuck their heads in the sand and thought this was the proper thing to do. They avoided numerous phone calls and finally got me all of the tax info this week. What can I say, they made other costly errors but I won't go there. So I've already discussed with them just needed a little reassurance that I was doing the right thing. Like I said better to fix now before tax returns are filed. Now let's see if I can get it all done before the 15th. Thanks for the speedy reply.}} | ||
Revision as of 21:29, 11 October 2009
Discussion Forum Index --> Tax Questions --> S Corp Officers no payroll
| 11 October 2009 | |
| So I've been reading posts all mornining trying to find a difinitive answers. Here's the problem in 2008 S-Corp all three Officers took $25K as "draw" with no payroll. I've already spoken to them about payroll and they are all receiving payroll checks for all of 2009. In prior years they have taken $65K in wages. So I'm wondering if I should go back and amend payroll reports and issue them W-2s for 2008? I'm working on tax return now, it has not been filed nor have their personal returns. I'm afraid if I send in return with no officer wages that it will "red flag" them. Their income was in excess of $650K. My thinking is amend payroll reports now, pay the payroll taxes as it will be more costly if audit happens. Any advice? | |
| October 11, 2009 | |
| Kathie - there are differing opinions on this board on this issue. The decision is yours to make; I just finished doing delinquent W-2's and the payroll returns for a client in the same situation (altho the dollars are quite a bit smaller). I wasn't willing to take the risk professionally, so I discussed it with my client and they agreed to paying the penalties on the delinquent payroll liabilities.
I'm curious why your clients did payroll one year, then decided not to. It doesn't sound like there's a cash flow problem - not with $ 650k in income. You also have to address what the 'reasonable salary' should be for 2008 with $ 650000 income....I'm assuming that's the S-corp net income. | |
| 11 October 2009 | |
| I don't think the 650K relates to net income if they only took 25K in draws. I think the 650K is gross 1120-S income OR (maybe) the 1040 income. | |
| 11 October 2009 | |
| Correct Kevin the $650K is not net, 2008 was a really bad year, in fact they have a loss for the 1120-S. They got jobs the last quarter which is when they took 18K each. They could not afford to pay me so they stuck their heads in the sand and thought this was the proper thing to do. They avoided numerous phone calls and finally got me all of the tax info this week. What can I say, they made other costly errors but I won't go there. So I've already discussed with them just needed a little reassurance that I was doing the right thing. Like I said better to fix now before tax returns are filed. Now let's see if I can get it all done before the 15th. Thanks for the speedy reply. | |
