Stimulus

Quote: SOOPOO

Guys, come on! My company was what I believe is called an S corporation. We paid ZERO in taxes. ZERO. All you had to do was distribute all the money that we made by December 31. So the corporation had zero profit. Each member who received money got a K-1 form. I was individually responsible to declare the income. I had to pay my own share of FICA as well as Medicare tax.
LOL at we couldn't get a loan because we didn't pay ourselves salaries! LOL! When we once needed a loan we just showed the bank our last two years collections and we got the loan. I think it took around 24 hours to approve.
On an average year I'd get around $50k in those 4 quarterly distributions. But one bad year it was $35k. A good year it was $60k. Since none of us needed a specific amount at any time, and we really couldn't be sure what it would be, it made total sense to do it the way we did.

Thinking back to my old job.... Instead of doing it fully the full distribution every quarter, we did a "draw" each month of $12k. So we 'guaranteed' ourselves $144k. Then each quarter we'd distribute whatever was left over. Maybe Bob calls a 'draw' a salary, but it really is not. As owners of the company, if there wasn't enough money to fund the $12k each month, we wouldn't get the $12k.

Just like my recent job, we emptied the account fully on December 31, and paid no corporate taxes.

Quote: AZDuffman

Exactly. You take a draw and pay taxes on that. The IRS is fine with it. For a loan the UW will want to see enough reserves to cover until the draw.

Quote: RonC

Like anything else, it is complicated:

"However, an S corporation must pay reasonable employee compensation (subject to employment taxes) to a shareholder-employee in return for the services the employee provides before a distribution (not subject to employment taxes) may be given to the shareholder-employee."

"For example, a CPA who incorporated his practice took a $24,000 annual salary from his S corporation and received $220,000 in dividends which were free of employment taxes. The IRS said that his salary was unreasonably low and that $175,000 of the dividends should be treated as wages subject to employment taxes. The court upheld the IRS’s power to recharacterize the dividends as wages subject to employment tax. (Watson v. United States, (DC IA 05/27/2010) 105 AFTR 2d."

https://www.nolo.com/legal-encyclopedia/s-corporations-salaries-an-irs-hot-button-issue.html

Asking a good accountant first is the best way to proceed, not all of us amateurs here...since we may have understanding of certain situations but not of all of them.

Quote: AZDuffman

That is the problem with tax law, the IRS can make it up as it goes. My point remains that you take a minimal salary if any during the year and a bonus when possible. Taxable bonus vs. dividend, well the difference between tax avoidance and tax evasion is 18 months at Allenwood.

Quote: Gandler

There will be, it has not been released yet.

If you receive your refunds in Direct Deposit, they will automatically use your most recent information unless you contact them otherwise.

If you receive SS it will be deposited in the same account and your SS (possibly with the next payment).

Quote: AcesAndEights

If you received a refund via direct deposit for either of the past 2 years, they will use that same bank info. Hopefully there will be a mechanism for you to provide your DD info if that doesn't cover you. I sure hope so.

One thing that I haven't seen spelled out, yet, is if you paid taxes due via a checking account will they be able to use that info. The way it's phrased, I don't think they will.

I had taxes due for 2019 (already filed), but for 2018 I did receive a refund and that account is still valid. So I'm covered, but if you tend to owe most years (I try, but messed it up in 2018) you may be SOL on the electronic payment.

Quote: RonC

Like anything else, it is complicated:

"However, an S corporation must pay reasonable employee compensation (subject to employment taxes) to a shareholder-employee in return for the services the employee provides before a distribution (not subject to employment taxes) may be given to the shareholder-employee."

"For example, a CPA who incorporated his practice took a $24,000 annual salary from his S corporation and received $220,000 in dividends which were free of employment taxes. The IRS said that his salary was unreasonably low and that $175,000 of the dividends should be treated as wages subject to employment taxes. The court upheld the IRS’s power to recharacterize the dividends as wages subject to employment tax. (Watson v. United States, (DC IA 05/27/2010) 105 AFTR 2d."

https://www.nolo.com/legal-encyclopedia/s-corporations-salaries-an-irs-hot-button-issue.html

Asking a good accountant first is the best way to proceed, not all of us amateurs here...since we may have understanding of certain situations but not of all of them.

Quote: Face

Sorry for not paying attention; there's a bit too much demanding attention these days...

I filed my '19 in mid Feb. I assume that means that'll be what's used to judge me? And since I was on comp and had a whopping $7,XXX to claim, that I'm guaranteed on this list to receive "help"?

Do I understand this correctly?