Level 10

Late 941 penalty calculator

Forum|Forum|4 years ago
March 10, 2022
2 replies
17 views

Hi

Client wants to pay a wage to himself for 2021. He is the sole SH of an Scorp and wants to do a maximum 401K contribution. Do you know of a penalty calculator for late filing of 941s and late payment of payroll deposits?

This topic has been closed for replies.

rbynaker

Level 13

I'm no retirement plan expert, but don't elective deferrals to a 401(k) have to be elected and withheld during the tax year and remitted to the account in a timely manner? He may be able to do an employER contribution after the fact but I think the employEE elective deferral ship has sailed.

S

strongsilenceAuthor

Level 10

thank you.

qbteachmt

Level 15

For this: "Client wants to pay a wage to himself for 2021."

Has To Pay. It isn't a Want. Payroll is required for this person. If this entity was operating as an S Corp in 2021, yes, this was overlooked.

Yes, it's too late for 401(k). Or, are you considering Solo 401(k)?

https://directedira.com/2021_solo401k_contribution_deadlines/

Don't yell at us; we're volunteers

S

strongsilenceAuthor

Level 10

Thank you. Client is aware of the law. 2nd straight year he hasn't paid a wage. * I appreciate your emphasizing it.

The solo 401k is a good suggestion.

Should they pay the wage today, would it be a 2021 deduction or a 2022 deduction? Corp is cash-basis.

*This client could be my trainer for me about how I learn to teach the law and make the client adhere to it. I don't need a client who breaks the law.

qbteachmt

Level 15

Payroll is a cash-basis event. The FUTA and FICA reporting all use Pay date. Not Pay period, which might be all of last year. But, that also is one of the things IRS examines; dates they took any funds from the business compared to payroll. In essence, the IRS has the right to declare all takings were supposed to be payroll, and that allows them to assess interest and late fees/penalties, because this is considered an attempt to avoid paying taxes, which is not legal.

Don't yell at us; we're volunteers

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