This widget could not be displayed.
 
Labels (1)
0 Cheers
sjrcpa
Level 15
This widget could not be displayed.

W-3? That's the transmittal form for W-2s.

If they have employees yes they need to file it, along with a whole bunch of other stuff.


ex-AllStar
IRonMaN
Level 15
This widget could not be displayed.

Questions like this always get the best of my curiosity.  Did you really mean a W-3 or what form was the other preparer "making them file"?

I'm keeping this job. But I am selling surplus anvils on the side. If you are interested please call 867-5309
This widget could not be displayed.

Other accountant had him, sole proprietor LLC, file a $1,000 W3, after which the IRS sent him payroll tax bills to pay.

How would you handle it on the tax return? 

0 Cheers
qbteachmt
Level 15
This widget could not be displayed.

"why would another tax preparation practitioner advise so?"

Because someone heard something that was wrong or stated wrongly, or heard it incorrectly, or (excuse me, folks...) they are a Practitioner because they are only Practicing and don't know the rules that apply.

I find the terminology helps.

A single-person LLC is a Disregarded Entity = doesn't exist outside of that Person. This is treated as if they are operating as a Sole Proprietorship and file the business info on their own 1040 using Sched C.

W3 is Payroll. It is a Summary for all W2 issued. Were there W2 issued, to anyone?

Let's review that "sole proprietor" and "single-member LLC" don't get paid through Payroll, because there is no payroll for that person.

So, do we suspect a mistake has been made, or just bad guidance given?

*******************************
"Level Up" is a gaming function, not a real life function.
This widget could not be displayed.

Other accountant had him, a sole proprietor LLC in NC, file a $1,000 W3, after which the IRS sent him payroll tax bills to pay.

How would you handle it on the tax return's Schedule C? 

0 Cheers
IRonMaN
Level 15
This widget could not be displayed.

Did he pay payroll to someone?

I'm keeping this job. But I am selling surplus anvils on the side. If you are interested please call 867-5309
0 Cheers
This widget could not be displayed.

Payed $1,000 to himself. 

Now he says he might have signed paperwork for an S corp, which would make sense.

Doesn't have any paperwork and can't get a return phone call.

g

0 Cheers
IRonMaN
Level 15
This widget could not be displayed.

The other accountant is an idiot.  Sole proprietors don't pay wages to themselves.  Amend the payroll tax returns and W-2.  The "wages" should be backed off of the schedule C if they were taken as an expense.

I'm keeping this job. But I am selling surplus anvils on the side. If you are interested please call 867-5309
PATAX
Level 9
This widget could not be displayed.

This matter may have a rather distinct possibility of giving even a bottle of Tylenol a headache... Just my opinion.

qbteachmt
Level 15
This widget could not be displayed.

"This matter may have a rather distinct possibility of giving even a bottle of Tylenol a headache... Just my opinion."

Or, it might be job security for whoever becomes the trusted (and reliable) business advisor. Then again, the mention of "loss" is a bit worrisome, and especially if it turns out it really is an S corp.

*******************************
"Level Up" is a gaming function, not a real life function.
0 Cheers
qbteachmt
Level 15
This widget could not be displayed.

A W3 is sent as a cover sheet to a W2. File a corrected W2C and W3C both showing $0. There is no payroll expense here and no payroll taxes to be paid; if anything was paid, file for a refund (such as 941X, if that was used).

For S Corp or not, you need to get info from the IRS. There would be FEIN, so find out what the IRS has on file for that FEIN.

Then, if you find S Corp status was applied for, you need to find out when it was granted and when it "starts." If it is supposed to be in 2020, then you need to do a year end payroll properly with "reasonable wage" and I imagine $1,000 is not reasonable. That also means there is no Sched C, because now, the person is employed by their corporation.

If all of this is new to you, you should find a mentor. My recommendation, if you find out there is supposed to be 1120S, is to put it on extension, because it will likely take a bit to find someone that can help at this point in March.

*******************************
"Level Up" is a gaming function, not a real life function.

View solution in original post

This widget could not be displayed.

Thanks, 

g

0 Cheers
This widget could not be displayed.

Very thank you for the astute advice. S corp was never set up. Paying the taxes, penalty and interest. Will then file 941x for the principal to be returned. Schedule C on 2020 tax return.

Again, thanks qbteachmt

g

 
0 Cheers
qbteachmt
Level 15
This widget could not be displayed.

"Paying the taxes, penalty and interest."

No; that means Payroll filing was an error. You don't pay taxes and penalty and interest on $1,000 of payroll. You file the corrected form that nothing ($0) was paid at all. And you remove it from the Expenses for the business data.

"Will then file 941x for the principal to be returned."

No; all of it needs to be returned. That is not Payroll tax. There is no such thing as Payroll Tax for this entity. It goes back to the owner.

Look at this similar topic:

https://proconnect.intuit.com/community/proconnect-tax-discussions/discussion/re-paying-taxes/01/138...

 

*******************************
"Level Up" is a gaming function, not a real life function.