Expert Payroll Services for S-Corp Owners
Managing payroll responsibilities regularly can be time-consuming and take focus away from growing your business. Keith P Clark CPA PC offers affordable payroll management services for S-Corp owners, so you can dedicate more time to strategic business growth. We’ll handle the complexities of determining your salary and ensuring correct federal and state tax withholdings, helping you avoid potential issues with the IRS or state tax authorities.
Payroll Services
Tax Savings and Planning for S-Corp Owners
An S Corporation (S-Corp) offers potential tax savings by passing net income and losses through to the owner’s personal tax return. Many small business owners choose an S-Corp to save on Social Security and Medicare (FICA) taxes, but careful planning is essential to avoid costly mistakes.
Salary Planning and Tax Compliance
S-Corp owners can save on payroll taxes by paying themselves in shareholder distributions rather than salary, as FICA taxes don’t apply to distributions.
Owners must determine their “reasonable compensation,” which can be subjective and depends on various factors such as industry standards and business profitability.
Failing to pay a reasonable salary or underpaying can lead to IRS scrutiny and penalties, making it crucial to find the right balance.
S-Corp owners must file Form 1120-S annually, ensuring compliance with tax laws and avoiding unnecessary tax burdens.
S-Corp Owner Salary Compliance and Tax Risks
S-Corp owners must receive a reasonable W-2 salary for their services before taking distributions.
Many S-Corp owners risk penalties by taking little or no salary to avoid payroll taxes. The IRS actively audits such cases.
The IRS can reclassify distributions as salary, subjecting them to employment taxes and penalties, including up to 100% in payroll tax penalties.
A CPA who paid themselves a $24,000 salary and received $220,000 in dividends faced IRS penalties when the salary was deemed unreasonably low (Watson v. United States).
Keith P Clark CPA PC provides expert payroll services, including salary planning, tax compliance, and accounting for S-Corp owners with no hidden fees.
Professional Services
Customized Accounting
We work closely with your Denver-area business to identify the most effective accounting services, whether it's setting up your books or providing ongoing support. Our expertise ensures accurate records and smooth operations, suited for small to large companies.
Accurate Financial Tracking
With our professional bookkeeping services, your business will maintain organized and consistent records. This enables clear cash flow tracking, reduces errors, and ensures compliance with financial managers, investors, and tax authorities.
Complete Payroll and Tax Account Services
Whether you already have your payroll accounts set up or need us to establish new payroll tax accounts from scratch, we’ve got you covered. Don’t miss out on our expert financial planning service and get in touch today.