S Corp TaxationWages, then everything else
Employment tax attaches to wages. A distribution is not the same tax, and it is not a substitute for paying the person who did the work.
Say who was paid
The order is the whole point
Services come first. Wages for those services are the employment-tax story. A non-wage distribution comes after compensation that fits the work. We will not compute a savings from skipping the wage, and we will not print a sample salary. A sample salary is how a stranger's year gets pasted onto yours.
If cash left and the wage line is empty, the picture is unfinished. That is not a moral speech. It is a missing form. The year cannot be read until we know whether anyone was paid for the work the company actually did.
Texas deadlines run on Central Time, the clock the state already uses. A report that has to be in by evening is not a suggestion. We set the payroll accounts up so the journals land in the month the bank already shows, on that same clock, not in a later month that feels more convenient.
Setup is ours. Payday is yours
The wage accounts are opened on a full service provider the company will keep. They exist before the first paycheck is calculated. From that paycheck on, the company and the provider own every pay run. This practice steps out of the pay run, and the setup is never described as processing.
The journals still have to land. A provider that pays people into a void, with no wage expense and no payroll liability in the books, has not finished the month. We tie those entries to the bank the same way we tie a sales deposit. The pay stub and the statement are supposed to be the same event.
What reasonable means on this page
Reasonable is a facts conversation, not a percent of profit we keep in a drawer. The work the person did, the time it took, and what someone else would be paid to do it are the kinds of facts that belong in the file. We will ask for them. We will not invent them.
If you want a number before those facts exist, we will disappoint you on purpose. A number without the work behind it is the thing notices are made of. If a wage statement was issued, bring it to the call. If nobody was paid, say that in one sentence, and the wage line stays blank until a real payment exists.
Say who was paid
You will be talking to the Steven Palmieri practice.