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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Social Security
Satisfied Customers: 16547
Experience:  Licensed CPA, CMA, CFE, CGMA M.Accy Also Teach Accounting courses at Master's Level
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I am the owner of an S-corp. Our company started in Feb 2013,

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I am the owner of an S-corp. Our company started in Feb 2013, am i required to process my own payroll? for now we are not having any profit.

Megan C :

I realize you have a question about social security. My goal is to provide you with excellent service, and help you better understand your options.

Megan C :

How are you today?

Megan C :

As an S Corp owner, you are required to take a "reasonable salary" for your work with the company. So, the answer to your question is, Yes you are required to process your own payroll.

Megan C :

If your company is operating at a loss, you still have to pay yourself a reasonable salary...but that salary is deducted from the business losses so in effect you are only paying your payroll taxes.

Megan C :

Is there anything else I can assist you with today? If not, please rate as "excellent" so that I may receive credit for assisting you today.

Thanks for allowing me the opportunity to help you. Please let me know if I can be of any further assistance to you in this matter. I really enjoyed working with you – please feel free to request me again when you come back to ask another question. Simply enter "MyVirtualCPA" in the subject of your question Thanks again for being a JustAnswer customer
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Customer: replied 3 years ago.

I need some more information on the salary and dividend distribution for an S-corp NJ. would you explain me being 100% owner of an S-corp, how should i calculate my salary and how will i calculate the profit generated. What is the process of paying off profit to myself? Please advise.

Thank you for your follow up. Your salary would be what someone doing what you do would get paid for work. There's a rule of thumb that says 60% of your profits are salary and 40% are dividends. If you have little to no profit, you will still have to pay yourself a "reasonable" amount. You would pay yourself just as if you would pay any other employee.

Thanks, XXXXX XXXXX me know if you need anything additional.
Customer: replied 3 years ago.

If i take a loan from my sister just to have better cash flow and keep it in my business checking account, do i need to pay any kind of tax on that. I may repay the loan to her in next 6-8 months. Please advise.

Ina,

Loan proceeds are not taxable. You will pay no tax on that loan money.

Thanks

Megan
Megan C and other Social Security Specialists are ready to help you