USA Learning Payroll Adjustment on my own. Many questions. Boss also doesnt know.

[Candi123]

Hi, I am working on end of year payroll adjustments to the books. Matching SS-wages, tips, and taxes. Mostly using a W3 but our tax contractor told me that not all taxes are shown on a W3 and to properly adjust payroll to the books, i need to lookup state unemployment tax and FUTA as well.

Doing all of this has led me to the following questions. We have a client who owns several companies. Some he is a direct owner, and some he owns a company that owns majority percentage in these companies of his.

Usually my journal entries look like this, debit/credit wages to match W3, do the same for tips, taxes, and whatever the leftover is, sometimes im told to put it against contractors, sometimes loan to/from stockholder(which is at random, an asset or a liability account, a passive account)

I hope I have been clear on everything so far. See questions below.

1. To balance these journal entries, sometimes my boss says to apply the difference for the last line of the journal entry to contractors, sometimes i'm asked to apply to loan to/from stockholder. What is the correct answer? This kinda ties in to my next question.
2. When someone, the owner of the company, an officer, doesn't cash their checks, do we still adjust their officers pay? What if they cash the check the next year? Whats the proper procedure for PR adjustment to avoid double expensing?
3. I did a journal entry for 1 company, there wasnt enough balance in contractors to split the difference for the last line of the journal entry. I was forced to use loan to/from stockholder, is this correct???
4. My tax contractor mentioned something, it was that if a company is a partnership, we dont need to adjust books to reflect officers pay? Can you expand on this?
5. What real life processes occur that change who the officers are from one year to the next? I understand from doing adjustments that to ensure accuracy, I must ask the owner every year to list the officers in case there are any changes and one of the new officers is on W2 and needs to be adjusted to officers pay.
6. For one company, the OA has a listing of Members (2 names) and another list of investing members (5+ names). Who are the officers? This is not clear to me. Do i need to ask the owner who the officers are?
7. Same company, the OA reads, "No member needs to be an officer". Is this true? This is another indication that a list of officers is meaningless and that all officer names need to be confirmed by the owner and each year in case of changes.
8. This owner owns Company example "A". "A" receives K1 from "B". If "B" pays the owner a W2 in his personal name, do we adjust books to reflect this as officer pay to company "A" or to the owners personal name? Can "A", a company, even be considered an officer?

 

[BIG E]

I think you need to take an accounting class and learn these things on your own,
as well as a course on payroll tax law compliance.

 

[espresso_941]

Well this one is easy:

Who are the officers?

In many US states corporations have to make some kind of annual report to the secretary of state, just ask them for a copy of that report or their meeting minutes when they elect officers. In some states you can actually just look it up their annual filings online.

 

[Candi123]

Well this one is easy:

In many US states corporations have to make some kind of annual report to the secretary of state, just ask them for a copy of that report or their meeting minutes when they elect officers. In some states you can actually just look it up their annual filings online.

I always question the OA that passes through my company, but there was a line that said "no member needs to be an officer". Also, as the people change each year, the people who receive K-1s, and this doesnt get updated to any list that im aware of. My boss agreed with me that we should ask the client each year, the name of everyone receiving a K1 that year so we can know who will be listed as an officer. Again, I don't trust every teaching from my employer. One company we deal with has 7 K-1s that are issued. This list changed last year and the year before that.

 

[espresso_941]

I always question the OA that passes through my company, but there was a line that said "no member needs to be an officer".

All that depends on the state they are incorporate in.
Ask them if they are using a attorney or some kind of corporate consultant to make their Operation Agreements.
No member needs to be an officer, but every company needs at least one officer.

S corporation employees, shareholders and corporate officers | Internal Revenue Service

The definition of employee for FICA (Federal Insurance Contributions Act), FUTA (Federal Unemployment Tax Act) and federal income tax withholding under the Internal Revenue Code include corporate officers.

www.irs.gov