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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Throughout fiscal year 2012 my boss took about $38k in draws.

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Throughout fiscal year 2012 my boss took about $38k in draws. Now he wants me to make an adjustment in the books moving the $38k to payroll and paying the appropriate taxes. Is it OK to pay all the taxes in the 4th qtr of 2012 on money that he actually received throughout the year?
Thank you for your question, and thanks for coming to

You should not have a problem paying all the taxes in the 4th quarter for money received throughout the year. The main thing is that he's paying payroll taxes during the year he earned the money. This is actually quite common to reclassify draws as salary at the end of the year, especially with S Corporations.

I would go ahead and prepare the transaction as requested. Please let us know if you need anything additional. Thanks again for using and have a happy, and safe, New Year.

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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

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