My single-employee S-Corp receives payments at the beginning of every month from what I will call the Client. My S-Corp received what I thought was the 12th and final payment on Dec. 10, 2024. My online payroll service processed my final W2 wage payment the following week. And then, without notice, the Client paid my S-Corp an unexpected 13th payment on Dec. 31, 2024. My online payroll service then processed my W2 wages for this 13th payment of 2024 in the second week of January 2025. As a result, the first 12 Client payments of 2024 are connected to 12 of the W2 wages paid in 2024. However, the 13th Client payment is connected to 2024, while the W2 wages for this 13th payment are connected to 2025 W2 wages. The total on the 1099-NEC the Client sent my S-Corp includes the 13 payments. I imagine the 1099-NEC is reported to the IRS. As a result, my [2024 W2 wage total] + [2024 K1 Distribution total] do not add up to the total reflected on the 2024 1099-NEC. If I increase the amount of 2024 W2 wages to include the first W2 wage payment of 2025 and its K1 distribution, the 2024 W2+K1 total will match the total on the 2024 1099-NEC. However, if I do this, then the amount of the 13th payment will be taxed in 2024, and then will be taxed a second time in 2025 based on the eventual 2025 W2 from my payroll service including the first 2025 W2 wage payment from the Client's 13th payment of 2024. On the other hand, if I do not increase the 2024 W2 wages (e.g., if I don’t file a corrected W-2C via BSO website), then there will be a mismatch between the amount on the 2024 1099-NEC and the 2024 W2+K1 totals. So, what is the best remedy for this situation? Can I leave the 2024 W2 totals that my payroll service reported as is? And can my S-Corp essentially pull that 13th payment of 2024 into 2025? Any help, advice, or insight is greatly appreciated.
