Failure to pay & File 941 taxes for S corp owner.

[Boma Osime]

A client an S - Corp owner paid himself but did not pay payroll taxes or file form 941. I am currently trying to file his S-corp company return. how do we handle the payroll taxes for the S-corp must we file the 941 and pay the taxes or do we ignore it and include the compensation as a deduction. What now happens on the form 1040 since there is no W2 do we include it as wages from the company with no tax payments or file a W-2. I had informed him last year about putting himself on a payroll being an S-corp. To the contrary can I include the payment he made to himself (owner/shareholder) as a 1099 self employment wages on the S-corp that would reflect on his 1040 schedule C as self employment income. I am just trying to figure out the best option. Would appreciate some guidance on this. Thank you

[New York Enrolled Agent]

. I had informed him last year about putting himself on a payroll being an S-corp.

Let me ask - why didn't you follow up on this? Did you think he was going to file quarterly 941 forms on his own?

[TaxGuyBill]

or do we ignore it and include the compensation as a deduction.

If he received compensation, late payroll forms (941s, 940, W-2, state filings, etc.) need to be filed. There will be late penalties and interest.

[Lion]

What Bill said. Or, if he simply cut himself a check, it looks a lot like a distribution.

Tell him to STOP that immediately and engage you or a payroll company NOW to finish out 2024.