AboutMike Wellman Expertise I was a former Manager with Price Waterhouse, now PricewaterhouseCoopers, the largest accounting firm in the world. I have had clients in almost every industry and of every size.
I will only answer questions dealing with IRS problems such as delinquent tax returns, Offers in Compromise (Tax Settlement), IRS collection matters including installment agreements, liens, levies, seizures, audits, appeals, innocent spouse claims and injured spouse claims. All other will be referred to the question pool.
Experience Over 25 years experience in taxation specializing in IRS collections, examinations and appeals.
Publications New York Times, Wall Street Journal, Your Money.
Education/Credentials BBA, Baylor University.
Awards and Honors IRSOS.com won the Knowledgeweb award for educational excellence for content.
Expert: Mike Wellman Date: 1/17/2008 Subject: Corporate draw
Question My son & I started a corp in Aug and we are on a fiscal year.(july through June). I am not getting paid. My son is getting a weekly draw. How do I report his income from July 2007 through dec 2007? Do I use a 1099? Does he report it on a scedule c on his personal taxes?
Do I wait and report his draws when we do our corp taxes in July?
Thank you,
Betty
Answer If it is a corporation you must pay him a salary/wage and do all the payroll reporting and withholding. Draws are for proprietorships and partnerships. It is not too late to fix this for last year. If you don't, he will have to report it as Schedule C income and pay self-employment tax on it in addition to income tax.
