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Forums » Accounting & Financial Management

Quarterly filing - when to start?

    • 15 posts
    April 29, 2007 9:52 AM EDT
    If you are talking about payroll liabilities and you do not have employees, you still need to file a zero return, see irs pub for forms 940 and 941.  If you are talking about your sales tax returns if any you need to file accordingly with what the state deems as your filing frequency.  If you are talking about your income tax then it is usually annual.  If you are talking about your excise tax or business occupation tax check with your state.
    • 6 posts
    April 29, 2007 6:03 AM EDT
    Here`s a question for you accounting gurus: if you have sufficient day job W-2 income to cover your FICA obligations, but you have a small business incorporated under subchapter S (so you take your business income as dividends), at what point do you need to start filing quarterly?   Can you just pay at the end of the year?

    Thanks,
    Scott

    swguy2007-4-29 11:5:31

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    • 15 posts
    May 8, 2007 5:11 PM EDT

    I would like to expand upon the replies previously given. Basically, if you are a shareholder of an S Corporation, this makes you an employee of the company. (even if it is a 1 person S Corp) When you only take distributions in lieu of a salary, you are only reducing your equity in the company. These distributions are not deductible as business expenses.Additionally, if the S Corp is making good money and all you are taking is distributions, then in the eyes of the IRS you are essentially failing to pay payroll taxes. Because the net income that flows through to your personal tax return on the K-1 comes through as ordinary income NOT subject to self-employment taxes. So - as I mentioned - if the company is making good profits and there is no "shareholder salary" on the corporate tax returns, the IRS can - at their discretion - reclassify some of your profits and charge you for back payroll taxes plus interest and penalties on whatever they consider to be a normal salary for someone in your particular field - according to the profits of the business. To be on the safe side, I would suggest that you start to pay yourself a salary. You can always get ADP or a similar payroll service to do all this paperwork for you. They can file all your quarterly payroll tax reports and year end tax filings for a minimal fee.

    VirtualCPA2007-5-8 22:12:59
    • 20 posts
    April 30, 2007 6:54 AM EDT
    Check with your accountant as the IRS has some strict rules related to S corps where the owners only take dividends and hence dont pay medicare, social security and FICA during the year. S corp rules are different from C corps in this regard.

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