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mwdissen
New Member

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?

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? 

1 Reply
Critter
Level 15

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?

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. 

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