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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 14192
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,

Resolved Question:

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
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

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

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 14192
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 5 other Tax Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Thank you for the positive rating. 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, and it will be routed directly to me. Thank you again for using JustAnswer. For the quickest service, please post a new question.

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