Reclass officer salary to equity draws? Hello, my employer is a contractor in the building construction industry. The company has experienced a net loss on operations for the year 2015. The sole owner, who is my boss, has paid himself about $75k for the year. However, considering the poor performance of the company, we have decided to file a Form 941-X for the final quarter of year 2015. The owner's
paychecks will be re-classed to equity draws. His revised salary will be about $50k. The tax liability will decrease by $7k.
The company is experiencing cash flow problems, so the payroll tax liability is past due by a few months. An installment Plan already exists to pay a similar tax liability originating in year 2013. The payroll tax liability for the first quarter of year 2016 will be beyond our ability to pay soon. The payroll tax liability for the final quarter of year 2015 is the same deal.
Good idea? |