How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Megan C Your Own Question

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
23669918
Type Your Tax Question Here...
Megan C is online now
A new question is answered every 9 seconds

Im a financial advisor and my broker dealer pays me all my

Resolved Question:

I'm a financial advisor and my broker dealer pays me all my commissions and fees throughout the year. My broker dealer will provide me with a 1099 at the end of the year. So of course, they do not do any tax withholdings for me. It's up to me to take care of my own quarterly tax payments. So I’ve set up an S-Corp. I pay myself a salary and withhold the appropriate taxes, on which I file on a quarterly basis with the Fed and State.
I’ve also been told that I have to have the commissions and Fees dropped into my personal bank account and not my S-Corp bank account due to FINRA regulations. That any securities commissions have to be paid to an individual not an entity.
I have set up and use Quicken to track my personal finances and Quickbooks to track my S-corp finances.
It is real easy with Quicken to track the commissions and fees as are deposited into my personal account. I then enter those deposits as accounts receivable chart of accounts entry then transfer those funds into my S-Corp account.
With Quickbooks, I then create an invoice for each deposit into my personal account using my Broker-dealer as the customer and receive the payment as an account receivable chart of accounts entry.
My question has two parts
1) Is that the correct way handling the commissions and fees using Quicken and Quickbooks? Or is there a better way.
2) How is 1099 income treated at tax at the end of the year and filing income taxes and what do I have to do so the commissions and fees pass through to the S-Corp so it is not double counted as income to myself?
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 :

First off, your Quicken/Quickbooks method is a good way to track these expenses

MyVirtualCPA :

Second, your 1099 income received to yourself is considered self employment income. To avoid having to pay employment taxes on the entire amount that you receive (your entire net income, that is) you would need to issue a 1099 to the S-Corporation for the amount that you paid them

MyVirtualCPA :

SO essentially you are paying yourself, and shifting the tax reporting from you as an individual to your S Corporation.

MyVirtualCPA :

If you are audited, then you simply show where you transferred the funds, issued the 1099 and paid the tax as an S Corporation

MyVirtualCPA :

Issuing the 1099 to your S Corporation is key, because it shows as a legitimate expense to your schedule C (which will have a net income of 0) and then show income to your S Corporation

MyVirtualCPA :

Is there anything else that I can assist you with today? If not please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today.

MyVirtualCPA :

Also I would seek legal counsel to determine if this treatment violates any securities laws.

MyVirtualCPA :

Hope this helps

MyVirtualCPA :

Please let me know if you need anything else in this matter.

Customer:

To follow up, and make sure I have this correct-I would be the payer, to my S-Crop as the payee, and which box would I put the

Customer:

dollar amount in Box 3 as Other income or Box 7 as Nonemployee compensation?

MyVirtualCPA : Box 7 non employee compensation. But, ask your attorney first to ensure this arrangement doesn't violate securities laws
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 2 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
Megan C
Megan C
8219 Satisfied Customers
Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level