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 Lev Your Own Question
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

This is Ken Leatherman we spoke about a liquidation of a

Customer Question

This is Ken Leatherman we spoke about a liquidation of a Oregon s corp and how the income would be treated, I have now moved to Washington and am a partner of the s corp. I am paid salary from the s corp, can you tell me how my payroll will be taxed?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.
There are two aspects of payroll - withholding and reporting on your individual tax return.
.
S-corporation is responsible for withholding.
Generally - there will be following withholding
- social security taxes 6.2% (up to the maximum - in 2015 - $118,500)
- Medicare taxes - 1.45%
- federal income tax withholding - based on W4 filing - Single/Married and number of allowances
In additional S-corporation will pay social security and Medicare taxes and unemployment taxes.
S-corporation will file employment tax returns - and will remit employment taxes to corresponding taxing authorities and will issue W2 form reporting your wages.
.
On your individual tax return - you should report wages (from W2 form box 1) on form 1040 line 7
http://www.irs.gov/pub/irs-pdf/f1040.pdf
Wages are added to other taxable income and based on your TOTAL income - your tax liability is calculated.
Then - you report federal income tax withheld (W2 box 2) on 1040 line 64 - that amount is credited toward your total tax liability.
So - if withholding is more - you will be refunded the difference.
Let me know if you need any clarification this matter.