If all the employees are non-salaried founders, do we need to send out W2's?


3

We founded a C-Corp in fall 2012. None of us are taking a salary and there are no salaried employees. Do we need to send out W2's?

Equity Tax Corporation

asked Apr 13 '13 at 23:30
Blank
Evan Hammer
16 points

2 Answers


1

The instructions, straight from the IRS, state the following (http://www.irs.gov/pub/irs-pdf/iw2w3.pdf ):

Who must file Form W-2. Every employer engaged in a trade or business
who pays remuneration, including noncash payments of $600 or more for
the year
(all amounts if any income, social security, or Medicare tax
was withheld) for services performed by an employee must file a Form
W-2 for each employee (even if the employee is related to the
employer) from whom: Income, social security, or Medicare tax was
withheld. Income tax would have been withheld if the employee had
claimed no more than one withholding allowance or had not claimed
exemption from withholding on Form W-4, Employee's Withholding
Allowance Certificate. Unless otherwise noted, references to Medicare
tax include Additional Medicare Tax. If you are required to file 250
or more Forms W-2 or want to take advantage of the benefits of
e-filing, see E-filing.

answered Apr 14 '13 at 04:44
Blank
Henry The Hengineer
4,316 points
  • This makes me think that has no employee is salaried or receiving any compensation at this point, that W-2's are not required. – Evan Hammer 7 years ago

1

The more appropriate question is "should we be talking salary". Generally you must pay yourself a reasonable salary, at least if the company is making money. In case of C-Corp, the IRS might expect reasonable salary for officers even if there are losses, since C-Corp can accumulate those. You should discuss it with a CPA, but you might get nailed by the IRS for not drawing salary.

answered Apr 14 '13 at 06:40
Blank
Littleadv
5,090 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Equity Tax Corporation