Hello Linda, LLC as S-corp payroll question
Submitted by Anonymous on Mon, 2008-02-18 20:10.
Hello,
I set up a LLC at the start of 2007 and elected to have it taxed as an S-corp.
I am the sole member and I provide consulting services.
I have taken only $15000.00 from the business as a draw in 2007 but did not treat it as payroll. I had no other earnings but used other personal investments for income (that I will show on Sch D of my 1040).
Do I have to go through all of the payroll witholding taxes and forms for Federal and State (CA) for this amount or is there an easier way to deal with it?
Thanks very much for your help, Roger
S-Corp Payroll
Well, it's a bit late now. :) Any payroll taxes for 2007 were due in January, as were the tax filings.
Be that as it may, the $15K in distributions may or may not be deemed wages, if you are audited by the IRS. If that happens your company will be responsible for the payroll taxes plus any penalties & interest.
This also assumes you have sufficient basis in your S-Corp to make the distribution (taxable income > $15K).
Definitely the LLC/S-Corp should start paying you a salary for the current year. This assumes the company is profitable.
L:)