Sole Member LLC Wages wait for a real election

The election is the door

A limited liability company can elect to be taxed as an S corporation. The election has a form, a timing rule, and an effective date. Before that date, the owner is not an employee of their own disregarded company in the way people mean when they say 'I should be on payroll.'

After the election is in force, reasonable compensation becomes a real topic. The owner who works in the shop takes a wage, and the rest of the profit can move in other ways the S corporation rules allow. A wage invented without the shop's facts would be fiction, so this page names no dollar figure.

Late elections and relief are a conversation with the year's documents, not a promise from a website. If you meant the election for a year that already started, tell us the date you hoped for and the date anything was actually filed.

Payday is set up, then you run it

When wages are real, we register what needs registering, pick a provider with you, and map the wages into the books. You, or someone you name, approve the cycle. We do not become the payday.

Deposits, quarterly reports, and the wage forms at year end are part of having wages. They are why we do not turn wages on as a decorative idea for a deduction. The

deduction page says the same thing from the other side.

Contractors are not wages. A helper who brings an invoice is not, by that invoice, an employee. Classification is its own look at the work, the control, and the agreement. We stop and tell you when the facts are muddy.

What stays true either way

The month still closes. An election does not retire the bank reconciliation. It adds accounts. The close date can stay the one you already keep.

The personal return still matters. An S corporation's profit reaches the owner on a schedule, and the owner still signs a personal return.

The signature page is the disregarded case.

The elected case still ends with a person signing.

If you are only curious, say so. We would rather tell you the election is early than open a payroll account you do not need.