4) What forms are correct to report this Employment Income from the Corp to the individual?
Wages are reported on pay stab each pay period. It is possible to pay wages in closely held corporations just one time per year.
A corporation pays 7.65% employment taxes plus 7.65% are withheld from gross wages.
Income tax withholding is not required but recommended
You will need to file an employment tax return form 941
See additional information here
It is very important that employment taxes are deposited timely to the IRS
here is how to do that
In Januarry - we need to issue form W2 to the employee and then file it to the IRS (as an attachment to form W3)
I strongly suggest to use payroll service to avoid situations with late filing and late payments.
4) What forms are correct to report this Employment Income from the Corp to the individual? Do I use a K1 to report the total of Self employment income and dividends? Or are there separate forms for Income and Distributions? Or do I simply use 2 K1 forms.
Do I use a K1 to report the total of Self employment income and dividends?
As we already discussed - there is NO dividends with S-corporation
K1 form reports shareholder's share of S-corporation taxable income.
That amount is included into shareholder s taxable income REGARDLESS if distributed or not.
Self-employment income is NOT reported on K1.
Or are there separate forms for Income and Distributions? Or do I simply use 2 K1 forms.
K1 form is issues to each shareholder.
K1 reported shareholder s share of corporate income, some deduction items and actual distributions.
Shareholder is taxed on his/her share of income regardless if distributed or not.
ONE K1 is issued to each shareholder.
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