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Old 02-19-2018, 01:52 PM
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Join Date: Feb 2018
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s-corp salary - how often? Once per year?

Hi,

my spouse and i have an s corp and it's just us. We have no problem meeting a reasonable w2 salary since we maximize 401k and now need to increase for the new tax laws to hit the deduction limitation.

But the question is more about how often do we need to run payroll? Our biz income varies wildly from year to year. We used to wait until Nov/Dec and just pay one big fat bonus check to each of us.

You all think that's still OK? It's a pain to run payroll so trying to minimize how often. Maybe one fixed salary in June for 401k, then a bonus in Dec to maximum or new tax deduction? Do we really have to do monthly?

Love to hear your thoughts on what will avoid troubles in case of an audit.

Thanks!



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Old 02-19-2018, 10:24 PM
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Join Date: Oct 2010
Posts: 5,090
But the question is more about how often do we need to run payroll?===============>>it depends; It?s up to the people who run an S corp,its officers and directors, to decide how much/often salary to pay the corporation?s employees. An officer of a S corp is always considered an W2 employee If the S-corp is losing money and not making distributions, then salary would be uncalled for. In effect, the shareholder/officer would be deferring his or her salary until better times. the IRS allows an S Corp to pay its owner-employee zero salary during its start-up phase when it earns little or no income or incurs a loss. In a recent court case, the taxpayers took no salary from their S corp. Instead, they withdrew funds by means of loans.

Our biz income varies wildly from year to year. We used to wait until Nov/Dec and just pay one big fat bonus check to each of us.==========>>it depends as said.

You all think that's still OK? It's a pain to run payroll so trying to minimize how often. Maybe one fixed salary in June for 401k, then a bonus in Dec to maximum or new tax deduction? Do we really have to do monthly?====>as mentioned above;



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