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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 579
Experience:  10 years experience
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Sole owner(schC) has issued a w2 to himself preventing him

Customer Question

sole owner(schC) has issued a w2 to himself preventing him from deducting 12000 dollars self employed sep.
JA: Hi September. The Accountant will know how to help. Please tell me more so we can help you best.
Customer: $37000 was profit from his business, instead of following the normal path, he issued himself w2. has form 5498 with a $12000 self employed contribution to sep.
JA: Anything else I can tell the Accountant before I connect you two?
Customer: how do we correct or reverse this w2?
JA: I'm sending you to a secure page on JustAnswer so you can place the $5 fully refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and connect you two.
Submitted: 10 months ago.
Category: Tax
Customer: replied 10 months ago.
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Expert:  Lev replied 10 months ago.
First of all - be sure to file for the extension - to have more time for SEP contributions.Correct employment tax returns - put zeros on amended employment tax return - and mark the last quarter employment tax return as final - so - there would not be any wages and the IRS will not expect additional tax returns - I assuming there were no other employees.Issue corrected (or voided) W2 form to the taxpayer.Report income and deductions on schedule C as needed and deduct SEP contribution. .Please be aware that with $37.000 net business income from self-employment - the maximum SEP contribution is $6877.There might be regular IRA contribution - $5500 (or $6500 for those above 50)Questions?