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Tax Law (Questions About Taxes)/1120-S Estimated Taxes or 941

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Question
This year 2012 I will be filing 1120-S federal return for the first time. I have a small business, no employees, gross about $45,000. I have been paying estimated taxes all year. Just last week I was told that instead I should have been filing form 941 employer's quarterly federal tax return, and, as a result even though I have been sending money in for estimated taxes I could be subject to fines. I looked at the 941 and it looks like that only applies if I had employees. Any help would be appreciated.

Answer
If you have a profitable S Corp the active shareholder is required by IRS code to take part of their compensation via a "reasonable" salary.  That involves placing you on payroll (like any other employee would) filing quarterly payroll tax returns and W2.  Payroll can get messy so I really recommend engaging a payroll service and/or discussing your specifics in more detail with a tax professional.

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Adam Shay, CPA

Expertise

I have an expertise in individual income tax and income tax planning. I also have experience working with small businesses (variety of entities) on both income tax and accounting needs.

Experience

I have spent 5 years managing 15 franchised tax locations. For the past 6 months I have owned my own tax preparation and accounting firm the specializes in assisting small business and more complex individuals. Accountant Wilmington NC

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AICPA NCACPA

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MBA from the University of Maryland BS from the University of Virginia

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