Shareholder Payments

IRS audits now routinely review S corp payments to shareholders to see if payroll taxes are being avoided by treating payments to shareholder-officers as loans or shareholder distributions of cash or property.

An officer performing services for a corporation is entitled to payment; those payments are wages. For federal employment tax purposes, corporate officers are employees.

Avoiding employment taxes by treating compensation as cash distributions, expense reimbursements, or loans rather than as wages is illegal.

Make sure you are paying your shareholders correctly! Get a check-up of your books.

Outsourcing Your Accounting

Let's face it. Times are tough right now. Money is tight everywhere. Do you really need to have someone sitting at a desk 5 days a week doing your bookkeeping? Or could it be handled in a couple of hours per week?

It's pretty hard to find someone to work a couple hours a week as a traditional employee. The solution is to outsource it to an independent contractor. This way you also avoid the cost of employee benefits and workers compensation premiums.

If you are currently doing your own bookkeeping, stop and think whether it is the best use of your time. Would your hours be better spent bringing in new customers and business? Outsourcing your bookkeeping could be a way to become more profitable.