1. How do I give myself a W2 if I don’t use a payroll service and just do bank transfer?
>> My accountant issues the W-2 at the end of the year based on the agreed upon salary setup. You could probably also do it using some online service or even purchase W-2 forms and hand-write one and send in copies to IRS + yourself.
I also have to pay estimated monthly employer+employee taxes collected/reported on behalf of the s-corp based on the salary setup, as well as quarterly state taxes, and some other such stuff. My accountant also files the quarterly IRS reports.
2. Can I give myself all the rest of the profits after the reasonable salary as distributions?
>> Any excess after your salary and other business expenses is reported and taxed as profit at the end of the year.
3. Do I report my W2 in personal tax returns and get taxed on it after paying the payroll taxes?
>> Your W-2 income from your s-corp is just like any other W-2 income and reported the same way (see my comment above about payroll taxes)
4. Can you move from taxing as an S Corp to sole proprietor down the line if income and business is smaller in a few years?
>> I don’t see why not but haven’t done this - there may be tax implications or potential changes that may complicate things. Best to consult an accountant.
5. Is it too late in the year to apply for S Corp status and I'll be filing as sole proprietor anyway for this year, so I don't need to do LLC till beginning of next year?
>> AFAIK, you can setup an LLC anytime but may vary by state? Don’t know if there are limitations on how quickly you can apply for a-corp status, etc.
>> I’d strongly recommend consulting a qualified accountant before going down this path to make sure it’s worth the overhead.
