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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Payroll/ S-Corp
Expert: John Kirk, CPA
Date: 9/21/2008
Subject: Payroll/ S-Corp
Question
My employers put their personal nannies on their corporations payroll and use company funds to pay them and their payroll taxes, they file a 1020-S, is this illegal? I am in charge of new hire paper work and when they bring in new nannies I've been told to put "administration" as the position they've been hired for, is this illegal?
Answer
If they charge the wages and payroll taxes to an owner's distribution account instead of deducting it, it is legal. If they deduct it as administrative cost, it is tax evasion which is a criminal offense. Tell them that they are playing with fire if they get caught.
John Kirk, CPA
www.johnkirkcpa.com
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