Accepted Answer

Generally payroll is reported in the quarter the paycheck is issued to the employee. Since in your case no payroll was issued in the earlier quarter, I do not think there is any risk to doing so at this point. I am also saying this considering that this is a one time occurence. If this is repeated often than the fact that the S Corp is a separate entity and that you are an employee of the S Corp could be challenged. Normally an employee working for a entity expects to be remunerated at reasonable intervals.
Needless to say that you must be drawing funds as distribution for your personal use. IRS may come in and recharaterize these amounts as payroll in case the payroll amount taken by you is not reasonable.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

Expert:	RD
Pos. Feedback:	99.4 %
Accepts:
Answered:	10/29/2009

Certified Public Accountant (CPA)

CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..