First the 1120-S should be filed for every year the corporation is in operation. Failure to take wages and file proper payroll tax forms needs to be corrected properly... however you could "pay" yourself as a sub contractor and enter that income on the Sch C which would effectively accomplish the same thing and can be defended in an audit. But going forward you should not rely on this method and you need to properly file the payroll tax reports, issue a W-2/3 and file the 1120-S timely.
