Question

Consultant payments for S-Corp owner

Forum|Forum|3 years ago
March 5, 2023
1 reply
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I have a Vet who is working on going part time with his S-Corp practice. He is wondering if he works at a different Vet business as sub when Vet is otherwise out for Vacation etc. Doe the payment have to come to him and be reported as Sch. C - making him owe self employment taxes. Can he have his S-Corp receive those payments and then pay the takes through the S-Corp. The S-Corp would make payment (less taxes withheld) to the Vet/Owner of the S-Corp. Is this proper? This does not affect 2022 return but the Vet wanted to see for future planning.

TurboTax Premier Online

M

MAK70

Yes, the vets that he subs for can pay the S Corp for the services - just make sure they know this is the arrangement and do not pay him as individual. They must also be sure they understand the reasonable compensation rules when making paying the wages. (This may also be of benefit for liability purposes.)