1120s salary for 10/15 filing
Client did not take wages from his 1120s business. I know I must take a reasonable salary, but how to accomplish this after the fact. How do I report the $10k we want to use as salary on his 1040? Withholding? Help...
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10/23/09 3:43pm PDT
Viewed by asker 10/24/09 2:47pm PDT
Viewed by asker 10/24/09 2:47pm PDT
4 Replies
CopperCanyonTax
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Questions answered: 648
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Allstar
Advisory council of community power users.
10/24/09 7:44am PDT
Best Answer - Chosen by the Community
When we have clients that take a dividend and no salary we reclass part of the dividend to officers salary, generate payroll reports, create a liability to pay the payroll taxes, and create a w-2.
Marc Barnes
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Marc R Barnes
Copper Canyon Tax and Financial Services
coppercanyontax.com
Copper Canyon Tax and Financial Services
coppercanyontax.com
10/24/09 2:47pm PDT
There were no distributions at all which is my problem. I must create a salary and how to deal with creating a substitute W-2 and reporting on a 941?
CopperCanyonTax
Questions asked: 2
Questions answered: 648
Points earned: 1779
Questions answered: 648
Points earned: 1779
Allstar
Advisory council of community power users.
10/26/09 6:23am PDT
First, their fiscal YE should be 12/31 and you would have time to fix. Second is there a profit, if not, I wouldn't fret. As a last resort, make a journal entry to record officers salary and offset with a liability account for payroll payable.
Marc Barnes
Find me on LinkedIn
Marc R Barnes
Copper Canyon Tax and Financial Services
coppercanyontax.com
Copper Canyon Tax and Financial Services
coppercanyontax.com
11/01/09 5:19am PST
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As stated before, if the person is a calendar year end then it should not be a problem. But if you do want to show salary, as Copper said, just debit officer's wages and create a liability called accrued wages.
