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Sole Proprietor or Single Member LLC paying themselves wages

mj46
Level 3

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???

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6 Comments 6
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.

George4Tacks
Level 15
NO!
Payroll companies do what the customer tells them to do. They seldom question the wisdom of their customer.

Here's wishing you many Happy Returns
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/0...


#StandWithUkraine
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.

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Still an AllStar
abctax55
Level 15

Good points/possibilities, Jensen.


#StandWithUkraine
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.

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