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Level 3
November 18, 2020

wages for sole proprietor or single member LLC

  • November 18, 2020
  • 4 replies
  • 19 views

I see several sole proprietors or single member LLC's putting them selves on their own payroll.  They insist on collecting wages, paying employer taxes and getting a W-2 from their own business.  Is this not legal and should they be told take themselves off payroll.

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    4 replies

    IRonMaN
    Level 15
    November 18, 2020

    Yeah, they need to be evicted from payroll.

    Slava Ukraini!
    qbteachmt
    Level 15
    November 18, 2020

    You previously asked this very same thing, here:

    https://proconnect.intuit.com/community/lacerte-tax-discussions/discussion/sole-proprietor-or-single-member-llc-paying-themselves-wages/01/104375#M20565

     

    Did you read the info you were given, there? You don't need to keep asking; we are the same people as last month.

    Don't yell at us; we're volunteers
    BobKamman
    Level 15
    November 18, 2020

    @qbteachmt  "we are the same people as last month."

    Ah, but I was so much older then
    I'm younger than that now

    BobKamman
    Level 15
    November 18, 2020

    This question keeps coming up here.  For example, see

    https://proconnect.intuit.com/community/lacerte-tax-discussions/discussion/sole-proprietor-or-single-member-llc-paying-themselves-wages/00/104375

    Is it legal?  I'm trying to think of what law is being broken, or what tax is being underpaid.  If an Executive Order were issued to allow this, would anyone object?  I think that Schedule C filers are doing it because it's easier for them to keep current on their personal tax obligations that way.  I don't think IRS is opposed to people wanting to avoid delinquencies.  

    But maybe John Smith is thinking that a W-2 from JS Enterprises is an easy way to avoid questions from lenders who don't like dealing with Schedule C filers.  Is it fraud if a loan application states someone is an employee, rather than self-employed?

    abctax55
    Level 15
    November 18, 2020

    @mj46 

    "..They insist on collecting wages"

    Then I would *insist* they exit out of my professional life.

    @mj46 - @qbteachmt is right.  Please don't ask the same thing over & over again.  Our answers aren't going to change.

    ***********

    (@BobKamman - thanks, now I have to Youtube that to get the tune right 🙂

    HumanKind... Be Both