IRS Form 941 - Confusion Regarding 'Balance Due' Field

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IRS Form 941 - Confusion Regarding 'Balance Due' Field

Post by neolk171 » Wed Jan 11, 2017 2:38 pm


I am the sole owner of an S-corp and its only employee is myself. In the fourth quarter of 2016, my gross salary was $25,000.

I have filled out a Form 941 however the 'Balance Due' field is confusing me. Here is a screenshot with the values filled out:

The form is saying that the tax liability for my S corp is $6,773.75. Shouldn't the tax liability of the S corp be $4,861.25 instead since the employer is only responsible for half of social security and medicare tax rather than the entire amount? The employee (in this case, my self) would be responsible for the remaining $1912.50.

If I were to pay the entire $6,773.75 from the S corp, wouldn't that additional amount ($1,912.50) count as a shareholder distribution since the company isn't liable for this portion of social security & medicare tax?

Any help is greatly appreciated!

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Re: IRS Form 941 - Confusion Regarding 'Balance Due' Field

Post by Taz » Wed Jan 11, 2017 4:29 pm

I do light bookkeeping and payroll for an S corporation. The owner & other employees receiving wages have to pay income tax on their earned wages and their portion of SS/Medicare (just like you). The corporation also pays the other half of SS/Medicare as a payroll expense, just like wages. The withheld taxes for all the employees and the company's portion on those wages are paid out together.

Shareholder distributions are not considered wage income so you do not pay SS/medicare on them, but they do get taxed elsewhere on your income tax return along with company profits.
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Re: IRS Form 941 - Confusion Regarding 'Balance Due' Field

Post by Ace1 » Wed Jan 11, 2017 4:51 pm

1/2 of the total social security/medicare tax ( 1912.50) is expense to the s corp.
The other 1/2 is withheld from your pay by the scorp.
The federal income tax withheld from your pay, and the total social security
( both the withheld from you and the company expense) is what the scorp remits to the government.
You need to remit this via the EFTPS system by the 15 th.

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