Forgot to pay myself most of last year...got an S Corp...need advice

[jmunjr]

Ok not me but my friend. She owns a small business registered as an S Corp. She has contracted employees, expenses etc and after all that her company's net profit was $200,000 last year(2012) fiscal calendar ending on December 2012,

Here's the problem, she only paid herself $13,000 last year(two checks), the last payment being maybe October 2012.

What can she do? How much will her S Corp owe in corporate taxes? Will the remaining money within her corporation after taxes from 2012 be taxed again when paid to her in salary this year, effectively being double taxed?

What are her options? Can she pay herself a distribution for 2012 still? If not, can she do it anyway(post dated) and take the chances, pay a penalty etc?

She has an accountant who obviously was nto on top of things. I'mgoing to ake sure she gets a new one.,.

Thanks for any help.

 

[kirby]

Ouch. If she reports a low salary irs will scrutinize for evasion of self employment tax. Best to get a new accountant right now and follow their guidance

 

[jmunjr]

Ouch. If she reports a low salary irs will scrutinize for evasion of self employment tax. Best to get a new accountant right now and follow their guidance

Well that sucks but she wasn't doing that. She didn't need to get paid and literally lost track and her accountant didn't do her job.

What are the tax consequences of this regarding corporate taxes and personal income tax on future salary distributions. Will she essentially get taxed twice (corporate on the $200K income then personal on whatever gets paid to her from that $200K)?

Thanks again.

 

[kirby]

She will not get taxed twice, which is a nice feature of the s corp. Her accountant can explain why that is so to you.