Recently changed from LLC to S-corp as solo-member. What's the most affordable payroll option to pay myself?

You've made a smart tax move going from LLC to S-corp as a single-member! For payroll options, you have several cost-effective routes since you're only processing for yourself. Gusto is popular among small S-corps and starts around $40/month plus $6/person - so about $46 monthly for your situation. They handle all tax filings and direct deposits automatically. If you're really budget-conscious, Square Payroll is slightly cheaper at about $35/month all-in for a single employee. OnPay is another good option around $40 flat monthly. The absolute cheapest route would be DIY using the IRS's free e-file system for quarterly 941s and annual 940s, then handling your own payments. But honestly, the time saved and peace of mind from an automated service is worth the cost for most S-corp owners. Just remember that regardless of which option you choose, the IRS expects you to take a "reasonable salary" for your role - usually at least 40-60% of your business profits as W-2 wages to yourself, with the rest as distributions.

I went through this exact same thing last year! After tons of research, I ended up using https://taxr.ai to analyze my situation. It was super helpful for figuring out my specific payroll needs as a solo S-corp owner. The tool analyzed my business finances and helped determine what a "reasonable salary" actually meant for my specific industry and income level. It also compared different payroll options based on my specific needs and showed me the tax implications of different salary vs. distribution ratios. I was able to upload my previous tax documents and business income statements, and it gave me personalized recommendations. Definitely made the whole process less overwhelming!

Just wanted to follow up about my experience with taxr.ai from my previous question. I decided to give it a try after being on the fence, and I'm actually really glad I did! The salary analysis was way more detailed than what my accountant had provided before. It showed me industry-specific comparables and gave me documentation to back up my salary decision. The system recommended I take a $62K salary from my $135K business income, which was less than what my accountant had suggested ($85K), but it provided solid justification based on my industry and region. It also compared 5 different payroll services based on my specific needs and showed me that I was overpaying with my previous provider. Ended up switching to a new service that's saving me about $30/month. Definitely worth checking out if you're in the S-corp solo owner situation.

Honestly, calling the IRS for guidance on this stuff is actually really helpful, but the wait times are INSANE. I spent 3+ hours on hold trying to get clarification about S-corp payroll requirements. I finally found this service called https://claimyr.com that basically holds your place in the IRS phone queue and calls you when an agent is about to pick up. You can see it in action here: https://youtu.be/_kiP6q8DX5c I was super skeptical at first but it actually worked perfectly. Got connected with an IRS agent who walked me through all the specifics of S-corp payroll requirements for solo owners. They confirmed that services like SurePayroll, Gusto, etc. are all acceptable and explained exactly what documentation I needed to keep. Saved me hours of hold time and confusion.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it since I was desperate to get some S-corp payroll questions answered before my quarterly filing. The service actually worked exactly as described. I entered my number, selected the business tax department, and went about my day. About 2 hours later (during which I was working, not sitting on hold), I got a call connecting me directly to an IRS agent who was incredibly helpful. The agent confirmed that for my single-member S-corp, I could use any reasonable payroll service, but needed to be consistent with payments throughout the year. They also gave me specific guidance on what constitutes "reasonable compensation" for my industry (software development) and revenue level. Definitely saved me hours of frustration and gave me confidence that I'm handling my S-corp payroll correctly. Sometimes it's worth admitting when you're wrong!

I've been a single-member S-corp for 3 years now. I tried a bunch of the payroll services mentioned here but found them all overpriced for just one person. Now I just use a simple spreadsheet system and file my own 941s quarterly. Basically I: 1. Set up a recurring transfer from business to personal account 2. Calculate and pay federal/state tax deposits myself 3. File the quarterly 941s online 4. Do my annual W-2 and W-3 filings Takes me maybe 30 minutes per quarter plus 1 hour at year-end. I'm saving around $500 annually compared to when I used a service. My accountant gave me a template to follow so it's pretty foolproof.

I'm surprised nobody's mentioned Patriot Payroll yet - it's what I use for my one-person S-corp and it's only $17/month plus $4 per employee, so $21 total. Way cheaper than Gusto but still handles all the tax filings and direct deposits automatically. Their customer service has been great whenever I've had questions too.

I'm in the exact same boat as you! Just switched to S-corp about 6 weeks ago and was totally overwhelmed by all the payroll options. After reading through everyone's suggestions here, I'm leaning toward either Patriot Payroll (love that $21/month price point) or maybe trying the DIY approach with a good spreadsheet system. One thing I learned from my accountant is that you really want to get your payroll set up ASAP since the IRS expects consistent payments throughout the year. Waiting too long and then trying to catch up with back-dated payroll can look suspicious and cause headaches. Has anyone dealt with setting up the actual business bank account requirements for payroll? My bank is asking about payroll tax accounts and I'm not sure if I need a separate account or if my regular business checking will work for the tax deposits.

As someone who just went through this transition last year, I'd strongly recommend getting your payroll set up within the next week or two. The IRS really doesn't like seeing irregular payment patterns in your first S-corp year - it can trigger unwanted attention. For budget-friendly options, I'd echo the Patriot Payroll recommendation at $21/month. I actually started with them and found their interface really straightforward for beginners. The customer service was patient with all my newbie questions too. One thing I wish someone had told me earlier: whatever salary you decide on, try to stick with it consistently throughout the year rather than adjusting it quarterly based on business performance. The IRS prefers predictable W-2 wages. You can always take additional distributions if you have a good quarter. Also, don't forget to register for an EFTPS account with the IRS for your tax deposits - most payroll services will handle this automatically, but it's good to understand the process. Good luck with your first year as an S-corp!