I was operating as a sole proprietor for half a year, formed an LLC in July, then elected to be taxed as an s-corp. Do I owe payroll tax for distributions January-July?

mwdissen · ‎June 4, 2019

When do I need to start paying payroll tax for the payments I make from my business to myself (Federal & Maryland)? I am the only owner of the business. The s-corp election was made in August (within 75 days of forming), but the effective date is July 1, when the LLC was formed.

Do I need to retroactively pay payroll tax for any money I paid myself, or is it only going forward after the s-corp election is made? Are there going to be penalties since it's technically late, even though I just formed?

Critter · ‎June 4, 2019

Do I owe payroll tax for distributions January-July? No you do not. And you should start taking a paycheck going forward now ... don't worry about the first couple of months.

I was operating as a sole proprietor for half a year, formed an LLC in July, then elected to be taxed as an s-corp. Do I owe payroll tax for distributions January-July?