Thanks a lot you are very helpful, it was my fault that did not explain the years separately since I am dumb to understand maybe so sorry.

Let me clarify: for 2023 

RC is $125000 and no payroll till now, has taken $95000 as distribution could you please if give me numbers and how to run payroll for the rest of the year really appreciated as you mentioned 3/4 and 1/4 regarding the money taken and payroll will be done.

Also, his wife who has 51% interest shareholder and has a few hours in a week her RC is $25000 but did not run payroll as well.

How do I determine percent devoted in S-Corp for her and him, can I prorate by RC like this 25000/(25000+125000) would be 16% is it fine?

 For 2022 :: ( due date Oct 16, 2023) he has not W-2 but his wife has for $25000. Has taken $121000 distribution till now.

How about percentage devoted on 1125-E?

As I understood the whole amount for distribution convert to loan to shareholder and calculate interest receivable for each distribution in 2022 that I even do not know when he wants to payoff the loan in 2023! for calculating the interest to be honest. I am sure he taken as often as money as distribution when he needed. Is it a good idea having a 1099 for compensate of the payroll tax? but sure will get a penalty.

I had a client who would take "loans" through the year, because her contracts didn't settle until the fourth quarter (her business was Summer seasonal), and then we would do an annual year end paycheck (including fringe benefits like personal use of company vehicle). Her distributions were 1/10th of her final payroll, but she claimed she was never sure through the year how the year would end, so she handled her uncertainty with minor cash distributions, then a big paycheck at the end.

For above topic you meant only one payroll in the year but she taken loan during the year instead of distributing in her accounting right?