My client is the only officer of a C corp and his former accountant usually reports withdrawals as "contract labor" on 1120, then report it as income on line 12 of his 1040. Is it better to treat his withdrawals as dividends and issue a 1099 DIV for him as opposed to a 1099 MISC as he has been doing it?
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Good thing his former accountant is his former accountant. Now that you are in charge you can get it right. If he is doing work for the corp he gets paid wages. Wages get reported on W-2s. W-2s mean payroll taxes and he needs to start paying payroll taxes.
and ex marks the spot where those rocks and anvils hit me.
This is pretty funny, if you read what you stated, again: "He's not really an employee to the company since he perfoms work very sporadically."
Work = work. You just described an employee.
"Level Up" is a gaming function, not a real life function.