S-corp

[Heist]

This sounds like me a few years ago.

First and foremost - yes, get a CPA and have someone do your books.

Now I'm confused that I have been told I need to w-2 myself and pay myself a salary. Yes - this is correct. You don't work for the S-Corp for free, do you? No, you don't. The S-Corp needs to pay you as an employee.

Then others told me that I don't have to since all income is pass thru and that I just have to do a schedule k1. And these people are stupid. Yes, you'll get a K1 - but you are still an employee of the corporation. You're also a shareholder... hence the K1.

Now some 1099 I will get under my name and others with the corporation name since most medicare business I get paid at beginning of the year. Correct. Because when you sold Jane Smith in January of 2017, the S-Corp did not exist. Why would the S-Corp get commissions for a policy it did not sell? So, yes, the carriers will pay based on the structure at the time.

The best advice I can give - is what my CPA told me to do. (A) First and foremost, have all carriers pay your new S-Corp's business bank account moving forward, not your personal bank account. (B) Any 1099's issued in the SSN, rather than TIN, send to the CPA so that they can (somehow, I don't quite understand), transfer that money from you to your business. Again, I'm not exactly sure how that part of it works. I do know this: They do the book monthly (P&L) and don't even really ask for my 1099's at the end of the year. I send them over, but I'm not sure if they really need the 1099's as they track every dollar deposited into the bank account (give them access to your online banking).

Thanks for sharing. Does your CPA use your 1099 amount to file your s corp tax? Or just what is deposited by the carriars. I always thought the income filed for the s corp have to be the same as what 1099 reflects. So I've been reporting the 1099 sum only and not what was deposited and it's messing up everything.

 

[sshafran]

Thanks for sharing. Does your CPA use your 1099 amount to file your s corp tax? Or just what is deposited by the carriars. I always thought the income filed for the s corp have to be the same as what 1099 reflects. So I've been reporting the 1099 sum only and not what was deposited and it's messing up everything.

Actual deposits.

 

[russelltw]

You assign your commissions to your company. Had the IRS send me a letter about it and my CPA said to write a letter saying those commission for me personally were paid and accounted for in my corporate tax return. I included the corp tax id in the letter. Never heard anything back from them.