Partners salaries

[EEA LLC]

 I started my business as a partnership.  I've been paying myself and my partner wages and having taxes withheld, which now I understand wasn't the way to go.  I filed our partnership return and included my wages in Guaranteed Payments and now it looks like I am going to pay self-employment taxes on my portion of the net income from the partnership AND on the Guaranteed Payments (which were my wages) through my personal tax return (even though payroll taxes were already withheld).  How can I address this situation?  

[Mike9241]

evidently, you filed w-2's and 941's.  this requires you to file a 941-X for each quarter you reported withholding and/or fica/medicare taxes on partners "compensation". you would also have to file w-2 C's with the w-3.  also, your 1065 must be amended.  if you filed forms with your state these also need correcting. I strongly recommend that you use a professional to get this all corrected since your 1040 is due 10/15 assuming you haven't already filed. your 1065 was due 9/15 if on extension.  realize that you and your partner will likely get hit with underpayment of taxes penalties because you will have no withholding taxes to claim.  if you filed improperly in prior years, those years also need correction.  

[EEA LLC]

Thank you.  There will only be two W-2C for myself and my partner correct?  And when the 941/944 is amended does the overpayment of taxes need to be reflected on every 941/944 from the amended to the present?  I just want to make sure I understand what I am requesting when I visit an accountant.

[Mike9241]

you have to file a 941-X for each quarter the needs adjustment so that could be up to 4 941-X's each calendar year.  the944 is an annual return. when you visit the pro take along the 941,944, 1065 and any other return, such as state that need correcting. 

[Mike9241]

if you see a pro they should know what needs to be done. all you need to tell them are the quarters a 941 was filed in error. 

[EEA LLC]

Thank you.