My Client called QBO Payroll and had them enter historical data from the beginning of the year based on all their owner draw info. Do I now need to go in and enter an AJE to get the money out of distributions and into wages payable and then break it down in the AJE for individual owners and tax payments?
maybe it is terminology, but owners, sole proprietors or partners, are never allowed to be on payroll. They take equity draws. Taxes on net profit per owner are a personal event and the company does not pay wage taxes, the owner uses form 1040-es to make quarterly income tax payments
If the company is taxed as a c- or s-corporation, then the owners must be on payroll and there is no such thing as a drawing account.
Yes, It's a new C Corp and they were paying themselves out of the equity. Now they went back and had it reversed into paychecks thru QBO Payroll with the taxes taken out. I see the payroll report in QBO but now I need to get the distributions out of the equity account. Is it just an AJE from distributions to cash and then from there a regular payroll breakdown?