How S Corp Taxes are Filed?
S-corp should at minimum file the form 1120S and the Schedule K-1. If in case the shareholders are associated with S-corp who are drawing the salary, then payroll taxes also become the responsibility of S-corp.
Federal tax, FICA taxes are included in payroll taxes that are withheld from the pay checks of all employees, and also from the unemployment taxes. Reporting of Payroll taxes are done on the Forms 940 and 941.
Working of an S-corp
S-corp is a type of corporation, especially for tax purposes, who are elected to ensure that their deductions, credits, loss and income are pass through owners, refereed as shareholders, of company.
They are responsible for submitting and completing the Form 1120S to IRS. They also have to provide Schedule K-1 to every shareholder, so that they can report their net earnings share on the personal tax returns.
Tax Obligations of Self-employment
S-corp shareholders do not have to pay the self-employment tax on their net-earnings share from corporation. If the shareholder is receiving the salary FICA which is Social Security and Medicare tax, will get deducted from the pay checks they are receiving. Also, the S-corp will become responsible of paying the share of employee’s FICA tax.
Issues users face while recording s-corp distribution in QuickBooks
You are an S-corp and paying a reasonable salary to yourself and you have also filed W-2 for it. Now, you receive a payment from the client, which is large, and you are not willing to issue a distribution to yourself.
You may be confused that how you are going to categorize this type of payment to yourself as the LLC filing S-corp’s sole member. Now the question arises that whether this distribution to yourself is an expense or not?
Questions and issues like these may arise frequently, so to get the correct answer of same, you can get in touch with the SMB QuickBooks tech support helpdesk.
You can get in touch with our SMB experts anytime and get the answer to all your queries. You are free to share your issues with QuickBooks technical support team through email or chat. We also have a 24*7 working TFN ?smbaccountants.com, you can dial it anytime in order to have a one-o-one discussion with QuickBooks helpline knowledgeable and experienced representatives.
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