How to Stay in Compliance as an S Corp?
If you are a business owner who runs an S Corporation, this is a great time of the year to review your financial documents and ensure you are operating within compliance. However, there are a few action items you will need to attend to.
The first is reviewing your estimated payments. Have you made any to the IRS? There are several deadlines throughout the year: April 15th, June 15th, September 15th, and January 15th of the following year. Getting your estimated payments in on time is the best way to ensure you will not have underpayment penalties when Tax Day comes.
The second action item is compensation. Have you run payroll? Have you paid yourself using dividend checks? Avoiding excess distribution issues is imperative here, so you need to be certain of your compensation.
Thirdly, you need to be on top of your 1099 filing. If you have independent contractors, you need to collect W-9s from them ASAP, best if they are currently working for you, before the deadline to submit them in January of each year.
Lastly, you need to consider your tax position. Is there any way you can maximize your savings now that we are halfway through the year? There may be possible tax deductions you have yet to take advantage of, and there could be strategies to shift your tax position and reduce taxable income.
In conclusion, running an S Corporation can be challenging yet rewarding if you are able to abide by the sets of rules in place by the IRS. If you are still uncertain of how to stay in compliance as an S Corporation, please reach out to us at 832-295-3353. We would love to help you.