Level 3

Question

Sole Proprietor or Single Member LLC paying themselves wages

Forum|Forum|5 years ago
October 16, 2020
5 replies
20 views

Is it ever ok for a sole proprietor or single member LLC to put themselves on their payroll? I've seen several sole proprietors & single member LLC's paying themselves wages. Shouldn't the payroll companies inform them that should not be done. Or is it ok???

Lacerte Tax

This topic has been closed for replies.

sjrcpa

Level 15

We just had this discussion in the last few days.

With the horrible search function here I cannot find it.

Short Answer - No.

The more I know the more I don’t know.

George4Tacks

Level 15

NO!
Payroll companies do what the customer tells them to do. They seldom question the wisdom of their customer.

Answers are easy. Questions are hard!

abctax55

Level 15

And I will reinforce with a NO, you can't.

Here ya' go, Susan.

https://proconnect.intuit.com/community/lacerte-tax-discussions/discussion/re-sch-c-owner-employee/01/103930#M20368

HumanKind... Be Both

itonewbie

Level 15

If it's an SMLLC, by definition, but your client had intended for it to be treated as an s-corp, maybe it's time to have a discussion about the intention, accounting, operations, tax implications, as well as the way forward.

---------------------------------------------------------------------------------Still an AllStar

abctax55

Level 15

Good points/possibilities, Jensen.

HumanKind... Be Both

qbteachmt

Level 15

"I've seen several sole proprietors & single member LLC's paying themselves wages."

Have you then given them "the talk" and proper guidance and corrective action? This is your opportunity to be valuable to these people as a resource going forward.

Don't yell at us; we're volunteers

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