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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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If I have been acting as the executive manager for an LLC,

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If I have been acting as the executive manager for an LLC, should I give a 1099 or a W2 if the company pays for some living expenses such as home, car and insurance? The amount of the 1099 would be around $25,000

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

Do you own this LLC or are you a part owner of the LLC?

Customer:

I own 5% of the LLC through a Private Trust

MyVirtualCPA :

okay. The expenses are for services rendered as a manager?

Customer:

yes, because the other owners do not reside in the state of Arizona and I act as the point of contact manage their projects.

MyVirtualCPA :

Then you should be getting a W-2 and the company should be remitting payroll taxes for you

Customer:

ok, since they have been writing checks with my name and they total $25,000 and I cashed the checks, how do I go about catching up and create W2 now?

MyVirtualCPA :

They would go back and file payroll tax returns and then remit the payroll taxes due

MyVirtualCPA :

Then you would reimburse them for the amount that should have been withheld from your check

MyVirtualCPA :

They will need to file a 940, 941, W-2 and W-3

Customer:

simple enough, how do I proceed with filing for my own personal tax return at this point?

MyVirtualCPA :

You will claim the amount as income. You need to wait for them to issue your W-2

MyVirtualCPA :

so you will file an extension for now

MyVirtualCPA :

Pay your estimated tax due with the extension and you will be fine.

Customer:

as income under 1099?

MyVirtualCPA :

No, you wait until you get a W-2 to file your return

MyVirtualCPA :

Just calculate your estimated tax due on the $25,000 and remit that to the IRS with your extension

MyVirtualCPA :

YOu can use a tool such as the TaxCaster to make the estimate

Customer:

can I file for an extension as this point?

MyVirtualCPA :

turbotax.intuit.com/tax-tools/calculators/taxcaster/

MyVirtualCPA :

Yes, you can.

MyVirtualCPA :

It's form 4868

MyVirtualCPA :

www.irs.gov/pub/irs-pdf/f4868.pdf

Customer:

perfect.

MyVirtualCPA :

Is there anything else I can help you with today?

Customer:

yes, what is the best way to pay me as an executive director from this LLC?

MyVirtualCPA :

What do you mean by that?

MyVirtualCPA :

You would be paid using a W-2. Whether they pay your bills or give you a salary you would be taxed on that as wages

Customer:

should the LLC have me as payroll for 2013 or is there a better way to pay a partial owner acting as director of the LLC collect money out of the business for services?

MyVirtualCPA :

Yes, they should have you on payroll

MyVirtualCPA :

but that doesn't mean that they can't pay your bills

Customer:

is there a payroll company on line that services companies with one employee? PayChex never returned my call!

MyVirtualCPA :

Have you tried ADP?

MyVirtualCPA :

Also if it's a small business a local CPA firm should be able to do it

MyVirtualCPA :

I would have an independent bookkeeper in your area do it.

MyVirtualCPA :

You will have an easier time getting a hold of them. Paychex and ADP are better for large businesses.

Customer:

I want to do it on line, I will try ADP.

MyVirtualCPA :

Okay

Customer:

that is it. Thank you for all your help. If you look like the photo on my screen, I would like to respectfully XXXXX XXXXX on your looks. I think I was fortunate enough to get the best looing virtualCPA! You have yourself a great rest of the day.

MyVirtualCPA :

I appreciate that. Please take a moment to rate my response "excellent" so that I may get credit for assisting you today. Bonuses are also appreciated :-)

Customer:

and the brightest and smartest!

Customer:

so I hope.

MyVirtualCPA :

Well, I appreciate the kind words. Thank you.

Customer:

How do I request you next time?

MyVirtualCPA :

http://www.justanswer.com/finance/expert-myvirtualcpa/

MyVirtualCPA :

enter your question in the box below my picture

Customer:

will do.

MyVirtualCPA :

Ok... don't forget about rating the response! Thanks again

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