These last couple of years have been strange as we all know and I have been running payroll for myself (owner of the c corp) as well as payroll for one employee. But last year because things were slow and income reduced I did not take out much salary for myself. And after filing the W2's I think perhaps I should have paid myself a larger amount on the last payroll, but now it is too late to adjust.
Can I pay myself additionally as "officer compensation" and do this on a 1099-misc form?
Are there any other ways to do this and still file on time?
Or is it better to just take the low salary and hope it does not get flagged. Also my own personal tax return is going to be very low this year.
You can pay yourself as a subcontractor and file the 1099-NEC form reporting that income. Another option is to not treat the additional compensation as wages or self-employment income, which may reduce your tax but open you up to possible penalties down the road. You could also amend your W-2 and payroll tax returns to add the additional wages.
You should run some numbers up choosing different courses of action so you can base your decision on the amount of taxes and potential penalties associated with non-compliance versus compliance with the tax laws.
thank you, sounds like the 1099-misc might be the best way as the filing deadline hasn't passed yet. Amending W2 sounds like it could complicate things more?
An officer needs to issue himself a W-2.
[Edited 2/20/2022|5:22 AM PST]
@ThomasM125 and @ColeenD3 I hope I'm misreading what you guys are saying, but it is absolutely NOT an option to be issuing a 1099-NEC to an employee. I am absolutely horrified that so-called "Tax Experts" would suggest such an incorrect thing.
@mhariush If you think that some of the money that you took out of the corporation should have been classified as wages, you would amend the payroll forms, such as 941, 940, W-2/W-3 and any state forms. Issuing yourself a 1099-NEC or 1099-MISC for "compensation" as an employee is absolutely wrong.