I own an S Corp and have taken salary. I never setup payroll be a use I was told that all I had to pay was self employment tax by making estimated tax payments quarterly. Now I found out I had to setup payroll for wages. My question is how do I report the wages and estimated tax payments made on my 1120s return for next year. Is it too late to setup payroll now and pay payroll tax ?
I would report the withdrawals, to the extent they are equal to reasonable wages, as salary for the last quarter of 2016 on appropriate payroll tax returns. You may have to find a local tax professional to help you with it, but the change needs to be made so you might as well start now.
I would report the withdrawals, to the extent they are equal to reasonable wages, as salary for the last quarter of 2016 on appropriate payroll tax returns. You may have to find a local tax professional to help you with it, but the change needs to be made so you might as well start now.
Thanks BWA,
I understand that the employment taxes were supposed to be paid on a monthly basis. And they were not. So, when I prepare the payroll return for the 4th quarter what do I put for Oct, Nov ? $0 regarding the payroll tax paid. So it's okay to pay the payroll tax owed on the reasonable salary I paid myself in the month of December. So on the fourth quarter payroll return only December will have payroll tax paid right ?
It's certainly not best practice but if you change withdrawals to salary at year end I would report them as year end. Beginning next year, handle it correctly.
and don't forget to file the employer returns and payments on Form 941
I would file all the end of year forms W2, 941 or 944 and deposit taxes .. the worst thing would be you would have to pay fines for not filing on time. (Hint, it's not about when you earned the money but when you were paid" that you need to file ) Fines are probably very unlikely unless audited, and still you have extentions. Then start keeping payroll. As long as taxes are paid That's the main concern.