A sole proprietor pays himself on a W-2. He is not an S corp. How can I deduct his salary on the schedule C.
You don't have salary as sole proprietor, so you can't deduct it. Did he also file 940- 941's
I think this question comes up here every year or so. It's not right, but it's a solution for some small business owners who have trouble keeping up with quarterly payments. Three weeks away from an extended due date, I would deduct it as wages and tell him not to do it again. Either take a monthly draw at the same time he makes a monthly ES payment; or set up an LLC taxed as an S corporation.
What line on the
What line on the schedule C would you enter the sole proprietor's wages? Line 37 specifically states "do not include owners wages" Line 11 states contract labor. Where do you recommend I enter the amount?
Under 'owner draw'.... which is NOT on Sch C.
The payroll reporting needs to be amended/corrected as a Sch C owner is not to be paid via W-2.
edit....
Or live dangerously/run with those scissors and follow Bob's advice.
September 26th? I would seriously consider taking those scissors and run. Put the amount on the "wages" line on schedule C and after October 15th start amending the 2024 payroll tax returns to do things correctly for the 2024 tax return.
Line 37. If they try to send him to Leavenworth I'll show up as a character witness.
One caveat: Does this result in a Schedule C loss? That makes it look as if he is trying to buy Social Security credits. I would adjust the deduction so it's break-even, in that case.
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