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Is it ever ok for a sole proprietor or single member LLC to put themselves on their payroll? I've seen several sole proprietors & single member LLC's paying themselves wages. Shouldn't the payroll companies inform them that should not be done. Or is it ok???
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We just had this discussion in the last few days.
With the horrible search function here I cannot find it.
Short Answer - No.
The more I know the more I don’t know.
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Payroll companies do what the customer tells them to do. They seldom question the wisdom of their customer.
Answers are easy. Questions are hard!
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And I will reinforce with a NO, you can't.
Here ya' go, Susan.
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If it's an SMLLC, by definition, but your client had intended for it to be treated as an s-corp, maybe it's time to have a discussion about the intention, accounting, operations, tax implications, as well as the way forward.
Still an AllStar
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Good points/possibilities, Jensen.
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"I've seen several sole proprietors & single member LLC's paying themselves wages."
Have you then given them "the talk" and proper guidance and corrective action? This is your opportunity to be valuable to these people as a resource going forward.
Don't yell at us; we're volunteers
