How to report Officer Compensation?

[onestop73]

In regards to form 1120 Office compensation, I have a client who refuses to use payroll, therefore is it ok to report his income one line  12 Form 1120, then carry this income to his personal directly on schedule C, so he can pay the SE taxes?

[IRonMaN · Accepted solution]

No, it isn't ok.  He needs to pay payroll.  If he isn't willing to follow the rules you need to consider referring to him as a former client.

[onestop73]

Thank you for that information, learning a lot here.

[onestop73]

For this former client, would it be beneficially correct to issue himself a W2 and pay the late penalties on the payroll taxes and reports?

[abctax55]

That's the *only* way to handle it, and if he does - then you can consider whether he has to be a "former" client.

[onestop73]

awesome! Thank you again for all the feedback, love this crowd!

[abctax55]

YVW...we'll be here all day/night/etc.  Tips accepted.

It IS nice to be appreciated; sometimes folks don't appreciate our 'humor'.

Hey...would you mind editing the header on your question so it says Officer (instead of just office)... it'll help with future searches of the data base.  TIA

[IRonMaN]

We like folks that appreciate the help.  Come back often, we are open 24 hours -------------------- just not in a row. :smile: