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Posted by Bill Brown on April 16, 2007, 6:29 pm
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> 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 S-corp does not have to pay salaries to its
employee-shareholders in the specific circumstances
you describe.
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