YANKA Posted February 27, 2008 Report Share Posted February 27, 2008 I made a terrible mistake, since October 07 at the request of the client I started a payroll for him and his wife based on hours work for their company, they wanted a weekly pay check , In January we filed for him the quarterly and annual reports. How stupid can I be, I do not know WHY I assumed he had an S corp, today he brings everything to do his taxes and I discovered that he is set as a Partnership with his wife. Besides amending the 940, 941 etc is anything else that I can do to correct this mistake, since partners are not to have salaries. I am thinking to request for an S Corp, am I to late for this, the client does not mind to change to an S corp, it is his first year. any suggestion will be greatly appreciated, I know I will not get any sleep tonite. Quote Link to comment Share on other sites More sharing options...
Alpha Posted February 27, 2008 Report Share Posted February 27, 2008 You can go ahead and apply for the S-corp status. Don't panic over this. I have several clients who have partnerships that insist on having payroll for themselves so they don't have to worry about estimated payments. I have never had a problem with partners being on the payroll. Quote Link to comment Share on other sites More sharing options...
OldJack Posted February 27, 2008 Report Share Posted February 27, 2008 >>How stupid can I be<< Yep... but not to fret! There really is nothing wrong with a partner getting a W2. Sure its not in accordance with what IRS says but it is a good thing to do for some partnerships that otherwise would have partners not paying their taxes. Its not likely the IRS will complain since they got 940 taxes they would not have gotten anyway. Also, not to fret! Since it is a partnership of husband and wife you are allowed to ignore the partnership and file it on 1040 Sch-C. I have seen a few cases where it was best for a proprietorship to have the owner on a W2. I would not bother to change anything. But then I don't mind other preparers criticizing me for not following the letter of what IRS wants and dictates. Quote Link to comment Share on other sites More sharing options...
YANKA Posted February 27, 2008 Author Report Share Posted February 27, 2008 Thanks to all for the support, I can rest tonite, I was getting sick thinking on what to tell him, after 20 years I feel like I know less and less. thanks again Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 27, 2008 Report Share Posted February 27, 2008 "I would not bother to change anything. But then I don't mind other preparers criticizing me for not following the letter of what IRS wants and dictates. " When I review other preparers work, if I am not going to amend, I do not tell anything to the client about little mistakes that I find on the return. As a professional, we do not have to put down or criticize other preparer. Sooner or later, we make a mistake (some small some big) but we are just human beings. "Thanks to all for the support, I can rest tonite, I was getting sick thinking on what to tell him, after 20 years I feel like I know less and less." I also feel the same way, every year I learn something new and this forum is great! Quote Link to comment Share on other sites More sharing options...
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