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Old 03-27-2016, 09:28 PM
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llc with mid-year s-corp election change

IRS granted me s-corp election for 2015 tax year on Aug 2015.

I got payroll setup and paid myself payroll Sept-Dec of 2015

My client sent me a 1099-misc for all the income for 2015.

Do i break it down and report income from Jan-Aug as an LLC/Sole Propiertship on 1099-misc section? and income from months Sept-Dec on Schedule K1 and enter my W2 pay information as income?

I am a little confused on how to report the incomes due to the mid-year election change and payroll starting in Sept 2015.

Details:
1099-misc received for 180,000
income jan-aug: 110,000
income sept-dec: 70,000



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Old 03-28-2016, 05:08 AM
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Posts: 4,803
correct in sch c and a corporate bank account. It is corporation money You are an employee of the S-corp, so you can not issue a Form 1099-MISC to yourself from the corporation.
You should put the money back in the corporate bank account. At this point, you have no "income" from the S-corp. If you keep the money you took out of the corporation, you will need to report that on your corporate return as a shareholder distribution. If those distributions exceed your shareholder basis, you will have a capital gain distribution on your personal return.



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Old 03-30-2016, 04:59 PM
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Corporate has a bank account, I have been paying myself through owners draw from jan-Aug, then sept-dec via payroll

I have been making estimated 1040 tax payments to the IRS on jan, april, june and sept.

How do I report my income since part year has been owners draw and 4 months have been through payroll/W-2?



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Old 03-31-2016, 02:08 AM
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?--------------->>>>> you, as an s Corporate officer ,do not get draws. you need to be on payroll, as employee.your income reported on your w2 is reported on 1040 line 7 as regular wage/salary and the income is subject to fica taxes to the irs. S corp shareholders generally prefer dividend distributions of their S cor?s profit over compensation payments from the S corp because the compensation payments are subject to payroll taxes and dividend distributions are not. To prevent S corp and their shareholders from avoiding payroll taxes by maximizing distributions and minimizing compensation payments, the IRS requires S corps to pay shareholders who provide substantial services reasonable compensation reported om w2 and is reported on f1040 line 7. S corps generally do not make dividend distributions. S corpd generally make non-dividenddistributions, which are tax-free, provided the distribution does not exceed the shareholder's stock basis. If the distribution exceeds the shareholder's stock basis, the excess amount is taxable as a long-term capital gain.
S corp distributions are not subject to soc sec taxes.



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