Business is S Corp, i didn't pay myself as employee but did distributions. Quarterly reports are $0.00. How should i file money received? Do i need to file a w2?

[accounting3]

So i did not pay any taxes on money that was received from the business to myself.

Do I go ahead and turn in a w-2 for the money and just report 0.00 withholdings. I am at a loss I didn't know i had to do this and fear i may be penalized.

[Anita01 · Accepted solution]

If you did not pay yourself, and you are a 100% shareholder or owner, the full amount of the profit flows through to you when you enter the k-1 from the Business.  If you haven't yet prepared a k-1 for yourself, you need to do that before you can file your personal return.

It's too late to issue a W-2 to yourself.  It doesn't matter whether you distribute any income to yourself or not.  All net profit or loss from the company flows through to you whether you actually distributed it or not.

You can take money out of the company for yourself, but that's not taxed in any way unless you have a profit in the business and then that profit is taxed when you enter it on the k-1 in your personal return.

[Lisa995]

How much profit did the S-corp make?  if youve got a large profit and took NO payroll....IRS wont be too happy, since you will be avoiding social security/medicare taxes on it.

[gregcant]

Exactly! And employee wages are deducted from the business profit(loss) that is flowed through to your return. How would one handle that scenario? How could you pay payroll taxes for yourself at the end of the year if it was not done during?

[sg20]

How is one to handle this to make them happy after the fact?