I have a California S Corp as 50% Equity shareholder, equal partners.
My equal partner (shareholder) is and always has been in charge of the Accounting in QB.
After 5 years, I come to realize that he has been Burying me in the shareholder distributions account by placing all my monthly Salary checks in there and also using The Funds transfer module to place all my ATM withdrawals in there too. The ATM transactions are valid cash purchases of business expenses with accompanying receipts.
Here's the Questions:
1.) How do I take these cash withdrawal entries placed in my Shareholder Distribution account and move them to the correct account? ie: supplies or office.expenses...etc.
And then what do I do next to make sure QB checks out with no errors?
2.) My monthly Salary checks we're placed into the Shareholder distribution account also but here's the thing,.......I was sent a 1099 every year and taxed as Vendor.
What is the best way to clean up this mess?
note: my partner was not taking any distributions at the time my distribution account was filling up.
Scales were out of balance by almost $100k.
you have more troubles than what they used to say, "Carter's has pills" You need far more than free internet advice. I suggest you immediately hire a CPA that is an enrolled agent, other than whomever the previous tax CPA was since this is I am afraid a very big mess.
at least that is my on the surface understanding of your dilemma. Like I said, you need a real CPA with forensic accounting background, maybe even a business divorce lawyer. Even if you had a guaranteed payment instead of salary before distribution it would not be on a 1099 but in your K-1
I agree with John, get with an independent tax accountant, enrolled agent immediately.
Your partner, charitably, does not know anything about corporate accounting, in which case a divorce is a definite consideration.
But it could also be fraud/embezzlement he is doing, in which case you should also keep in mind criminal charges, and or a civil suit.