ThomasM125
Expert Alumni

Business & farm

You are required to pay yourself a reasonable salary, based on the amount you withdrew from the business and it's profitability, and also what you would be paid for a similar salary job.

 

Since you didn't file a W-2 form, a work-around would be to report the salary as self-employment income in TurboTax. That way you will pay in self-employment tax that will account for your social security tax liability.

 

You would deduct the amount you reported as self-employment income on the S corporation return and report it as officer wages.

 

You other option would be to issue a W-2 form and complete the payroll tax returns 940 and 941. However, they will be late so will be subject to penalties.

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