"questioner" <mnquestio...[at]yahoo.com> wrote:

- quote -

The S-corp does not have to pay salaries to its
employee-shareholders in the specific circumstances
you describe.

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"questioner" <mnquestioner[at]yahoo.com> wrote:

- quote -

You are not reqired to pay yourselves.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

In 2006, three of us started and are equal shareholders in
an s-corp. There are no other employees and we all worked
for the corp. We lost money in 2006. The loss does not
count any wages paid to the three of us - because there were
no wages paid. I now know that we were supposed to pay
ourselves and issue W-2s. I did not know that at the time.

Since we lost money and there was no money to pay ourselves,
do we need to correct the no-wage problem? We can't say we
paid ourselves when we didn't, can we? All the information
I can find is related to reclassifying pass-thru profits as
wages and we had no profit.

We may shut down in 2007. If we continue, we'll figure out
how to pay ourselves. We DID file an extension before March
15.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >