USA S corporation W2 - FICA not withheld

[JohnSu]

My husband had a S corporation last year (Jun - December). It was our first year. He is the only owner (100%). He wrote himself checks as salary (reasonable) but never register himself as the employee in his corporation. So he did not withhold and transfer any FICA taxes (SS, Madicare...) Our accountant told us that we can do that during filling corporation taxes - that is not big deal. He was supposed to do our taxes, but we moved and now he does not return our calls. So I had to file all forms by myself and this is the only problem left.

What should I do now? I would like to ask for an extension to find new accountant and get more time to figure out what to do...but how much is the estimate what Am I supposed to pay them?? I do not know how to calculate it, as there is this W2-complication...

I really appreciate your help! Thanks.

 

[parmatax]

I am first going to ask if you registered with the state in which the business was located? If not then I would just record the money he paid to himself as dividend distributions or repayment of shareholder loans, whichever applies and the work on organizing 2014 for payroll. You can still file an extension, it needs to be postmarked today 3/17/14. Go to the irs.gov and use form 7004. Since it is an S Corp there will be no tax due so just fill in zeroes.

 

[infotaxsquare]

Hi,

Technically, if your company is registered as an S-Corporation and you are drawing salary then you should be registered with the labor and file appropriate payroll returns to federal, state and city (if applicable).

IRS wants you to pay self employment taxes on the reason salary and state wants you to pay unemployment taxes, otherwise federal and state may come back to ask you to do so.

Anyway, if you have a very low profit then you can show it on K-1 and if you have a reasonable profit then I would suggest you to file payroll returns to avoid complications.

Some accountants will also advise you to issue a 1099 to yourself, but technically it is not right and I do not advise.

Regards,

InfoTaxSquare.com