Pay roll Service

[Anonymous]

I always thought pay roll has to be either weekly or bi monthly or monthly as that how most people are paid.

I recently found out there are no such rules how often pay roll has to be in any given year. Is this true?

Single member LLC or if you own business, you can pay yourself once a year (yearly paycheck) and if a very profitable year then give yourself bonus such as with a paycheck of $154000 you can contribute $19000 for regular 401 k plus another $38500 (25% of $154000 is $38500 profit sharing) in 401k assuming your business can support these amounts.

I am looking in description TurboTax home can generate W2s. If I establish a business LLC with S corp status this year. Do you I need to buy 2021 TT home edition to generate W2s or earlier version can do that for 2021 taxes.

W2.

What does generating W2s involve? Copy for you and Copy for IRS? Is it paper copy or electronic copy or either?

What kind of software or service would I need to establish yearly paycheck? Can TT tax software do that or quicken perhaps or some other.

Costco offer some services (not sure if Payroll is one of them) so not sure which is most cost effective and efficient for single member small business owners?

[VolvoGirl]

I don't know much about payroll but you also need to file quarterly payroll reports form 941.

To prepare W2 Turbo Tax you need to use either Turbo Tax Business (which you would need to do a S corp return) or the personal Online Self Employed version or Desktop Home & Business program.

You really need to go to a CPA to get educated and get it set up right.   

[Anonymous]

I will go to CPA once I learned all the logistics so that I can answer right questions and what I am dealing with?

2nd question is how to find a right CPA for me.

[GGGJJJ]

It sounds like your company is already set up? So it would help if you had an independent bookkeeper. You don't need to pay CPA rates for bookkeeping though they would be happy to charge you!

They can set payroll up and the compliance, including state taxes, if you have any.  This way, you don't have to pay a full-time salary right now.

You can pay employees at a minimum once a month.  But however you decide to pay them, you can't flip the pay period around.  Employees must have a regular payroll period and pay date. It must be the same time frame, or the US Dept of Labor can fine you. 

You can take a bonus as often as you like as a member-owner but keep in mind your payroll is to be within the standard of your position.  ie, a president of a 250k company can't give himself a 100k salary. (You could, but the trustee will have you on the hot seat if the company goes bankrupt!) Additionally, you can't use it as your revolving personal checking account, so you avoid payroll tax.  You, as the owner, can adjust the amount of your payroll.  Say if profits are down, you can pay yourself $1.00 for the payroll period, so you don't have to go through the Member equity process or make an official loan to your company.

[Anonymous]

I am looking into only 1 pay check or yearly pay check and it is toward end of year when you have good idea of total income for that year and bonus payment.

I am not sure what kind of book keeping for Securities Trading LLC or S corp will involve. Since there are clients or employees other than owner. What ever your are buying and selling it is on your monthly statements with commissions.

Any money moving in or out will also be on your statement. Like Cash infusion or withdrawal. In brokerage business there is no actual CASH. Not sure why they use word CASH as all money movement is via either check, ACH or wire these days.

I have no intention of using LLC a personal bank account. I can pay myself and there is 2nd advantage with owner S corp you can pay yourself bonus on top of pay check (at least that's what I read online while searching on this topic).

[Critter-3]

If you have an S-Corp you can "pay" yourself once a year if you like but you still must file quarterly payroll returns even if you pay no wages in that quarter.  Seek assistance from a local payroll company to be educated in the federal and state requirements.  

If you are a sole prop or single member LLC then you simply take draws from the company account at will but you CANNOT pay yourself wages and issue yourself a W-2. 

If your "business"  will comprise of stock sales then you need to think long and hard about converting passive income only subject to fed & state taxes (possibly at a lower tax rate)   into wages that add SE taxes to the other ordinary income taxes.  

[Anonymous]

Critter-3.

Well there is a confusion here. What you are saying is correct for single member LLC but single member LLC with S election for taxes is different animal.

With S corp you can pay yourself wages, 401K contribution to max ($19500) and 25% profit sharing until $154000 (154000*..25= $38500)

Payroll taxes on SS (6.2 +6.2) and medical care (2.9% total) will be offset by saving of deduction of 401 k benefits and + tax deferred growth of those assets. Assets in 401K are better protected in law suits as well (I think). On the top of that you can deduct all other kind of expenses, Health, Dental, continous education, subscription, office, equipment etc.

Medicare taxes are tricky. Once your income crosses 200/250 single/married, all of your income from 0 till infiniti is subject to 2.9% tax.

In trading/short term  most of income is ordinary income any way. You will never qualify for TTS, if there is long term income.

Q. Obamacare Tax:

Medicare Tax is on earned income, income from work and investment income is NOT subject to medicare Tax.

Is this Obamacare tax on income "over" 200k/250K single/married or once your total income (income from all sources) hit that threshold then all of your income (0 till infiniti) wages and investment income become subject to 3.8 Tax?

Q. What are exclusions to Obamacare Tax? Muni interest? All of it or from your state muni only?

Does distributions from K1, subject to Obama care? Remember these distributions are NOT reported along with dividends as they reduce cost basis of original investments?