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I am currently in the process of filing taxes for my

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Hello! I am currently in...
Hello! I am currently in the process of filing taxes for my S-Corporation. I was wondering what I need to do as far as paying myself a salary from the corporation goes, and how exactly that works.Do I need to file two total tax returns? (one for the corporation, one for myself)And also do I need to file a form that reports the income that I pay myself from the corporation (W2 or 1099-Misc?)What salary amount should I pay myself given the annual revenue of about $143,000 and the annual profit of around $20-30,000 or so. Should I just pay myself 100% of the profit from the S-corp?
Submitted: 10 months ago.Category: Tax
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Answered in 4 hours by:
1/4/2017
Tax Professional: emc011075, Tax adviser replied 10 months ago
emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3,229
Experience: IRS licensed Enrolled Agent and tax instructor
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Hi. My name is ***** ***** I will be happy to help you.

Scorp is a separate entity for tax purposes. You will file a separate Scorp return (form 1120S), issue yourself a K1 and use it to complete your personal return. In addition you have to pay yourself a reasonable salary, meaning how much would you pay a stranger to do your job. It depends on the nature of your job.

You will issue yourself a W2 and you will also have to file payroll returns 940 and 941. You probably should have been filing 941 quarterly, depending how much you pay yourself.

First you will need to complete and file your payroll return, than you use the payroll return information to complete your Scorp return and W2. After completing your Scorp return you will get a K1 that you will use, along with the W2 to complete your personal return.

If it is your first time filing Scorp, I wold strongly recommend to hire a tax professional to help you, especially with the payroll returns.

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Tax Professional: emc011075, Tax adviser replied 10 months ago

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

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