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Sole Proprietor or Single Member LLC paying themselves wages

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Level 2

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 Replies 6
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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.


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

ex-AllStar
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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...

Former Chump... umm.... AllStar.
If a post answers your question, click on *Accept as solution* for future searches
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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
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Level 15

Good points/possibilities, Jensen.

Former Chump... umm.... AllStar.
If a post answers your question, click on *Accept as solution* for future searches
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Level 13

"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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