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I have a single member LLC and I file a Schedule C on my tax

return. I have a 2...
I have a single member LLC and I file a Schedule C on my tax return. I have a 2 other employees of my wholesale floral business. I paid myself and employees through payroll and all three of us took health insurance. In doing my schedule C it seems that I cant deduct the wages I paid to myself on a W2 and that I also can not deduct the health insurance. It seems than that I am being taxed once on the earnings from the Schedule C that include my wages and again on the wages that I report on line 7 of the 1040. Is that correct - double taxation?
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Answered in 6 minutes by:
4/2/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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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.

Thank you for your question, and thanks for using JustAnswer.com. As a single member LLC filing a schedule C on your taxes, you should not be paying yourself through a W-2. You should not have double taxation. You should be taxed on the profits from your business. So, you will need to amend your W-2 and W-3 to remove your wages. You will not file a W-2 for yourself.

Please let me know if you need anything additional. Thanks again for using JustAnswer.com and have a great day.

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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

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Customer reply replied 4 years ago


Thank you for your answer. I understand what your saying but how does reverse withholdings that were paid all year through a 941 filing. Are you saying that the 941's and NJ tax filings all have to be amended??

Thank you for your follow up. Yes, all of your payroll tax returns will need to be amended to reflect this change.

Thanks again for using JustAnswer.com and have a great day.

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*


You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
Megan C and 87 other Tax Specialists are ready to help you
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Thank you for the positive rating. Please come back and see me next time you have a question. It was a pleasure working with you today. Hope you have a great night.
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Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
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Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

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