2017 single owner LLC. Became S-corp in June, retroactive to January. Made quarterly pymts so the IRS has been paid - I did'nt issue W2s to myself . Am I screwd?

[stwischu1]

I know I need to file 1040 for my personal income, with part of income as wages and part on form K1.  I know my business needs to file for 1120S, showing wages paid and final profit matching whats reported on the personal K1.  I know I should have filed 941 quarterly. Didnt.  Since I was not an S-corp until June. I did make quarterly payments as an individual under EFTPS system, as 1040 estimated taxes.   Should I file 941 now and treat those payments as if they were soc. med. and Fed withholding for my 1 employee (myself) and then issue late W2 as well?  Or will this set off red flags?  Or just say screw it and consider all my earnings as non wage distribution since this is my first year as a corporation and I choose to not pay myself a salary.  Gross profit of the business after deductions were under $70k.

[Critter]

First you MUST pay yourself a salary and file the correct payroll tax forms ... it doesn't matter that you didn't do payroll for the first 1/2 of the year ... just do so now. 

After you file the 1120S  you will report the K-1 & W-2 on the personal return where the estimated payments will be recognized ... do NOT try to be tricky and pay back wages or file back payroll tax forms as that will cause more issues.

[stwischu1]

Not trying to be tricky, just legal.  So you are saying as the S-corp, do not send a W2 for 2017 at this point, but as the employee, do create a w2 for the purpose of showing social security and medicare allocations, which the IRS will then somehow take out of the Estimated payments I aleady made and send the to the correct bucket.   I did not submit any 941's last year which I should have done quarterly to show that soc sec and medicare and FEd withholding were taken out.  Again. The money is all there and in the hands of the IRS right now since I made those quarterly estimated payments.  At most I should owe under $2000 which is a $15 underpayment penalty.  What I am trying to avoid is a prolonged back and forth correspondance with the IRS and massive penalties.

[Critter]

OK ... starting now you must take a paycheck and file payroll tax returns monthly ... then at the end of the year you will issue yourself a W-2.  On the monthly payroll returns you will pay in the correct amount of FICA taxes but you can skip the federal taxes since you have already paid in the estimated payments.  You cannot use the already paid estimates against the payroll taxes you will owe on the 941s.... I would seek local payroll assistance and possibly income tax assistance so that you get the corp off to the correct footing if you have never completed an 1120S or payroll forms before... the education you get will be worth every penny because the cost of doing it wrong is painful.