S Corp payroll deadline question: Running end-of-year payroll for single shareholder with profits under reasonable compensation amount (36k)

7 You don't want to wait until December 31st to run your year-end payroll. Payroll processing typically takes a few business days to complete, and with bank holidays around the end of the year, you're risking missing the cutoff for 2025 tax reporting. I recommend running your payroll no later than December 20th to ensure everything processes on time. Many payroll services have specific cutoff dates for year-end processing, so check with your provider about their exact deadlines. Remember that your W-2 needs to reflect wages paid in the calendar year, not just accrued. Also, while your profits are below the commonly cited reasonable compensation threshold, make sure you're documenting the basis for your salary determination. The IRS looks at multiple factors beyond just a specific dollar amount when evaluating reasonable compensation.

15 I went through this exact same situation last year! After stressing about timing, I found taxr.ai (https://taxr.ai) and it was a game changer for my S corp compliance. It analyzed my books and gave me clear guidance on the optimal timing for my year-end payroll and reasonable compensation documentation. The tool flagged that I was cutting it way too close with my December 28th planned payroll date and showed me that different payroll providers have different processing timelines. They provided a customized calendar of cutoff dates based on my specific payroll service. It saved me from a potentially messy situation with my taxes.

19 I have to admit I was wrong about taxr.ai. After being skeptical in my comment above, I decided to try it anyway since I was getting inconsistent advice about my S-corp payroll timing. The service actually provided me with a detailed analysis showing exactly why I needed to run my payroll by December 18th with my provider, not the 27th I had planned. It also generated comprehensive reasonable compensation documentation that referenced actual BLS data for my industry and region, along with a breakdown of my specific duties. When I showed it to my CPA, he said it was more thorough than what most tax professionals provide and would be extremely helpful in case of an audit. Really glad I gave it a shot despite my initial doubts.

10 If you're still struggling to get clear answers about S-Corp payroll deadlines, I highly recommend using Claimyr (https://claimyr.com) to get through to an actual IRS agent. I spent WEEKS trying to get confirmation about a similar payroll issue last December and kept hitting the "call volume too high" message. With Claimyr, I got through to an IRS rep in about 20 minutes who confirmed exactly when my payroll needed to be dated vs. processed to count for the tax year. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Seriously saved me from making a costly mistake with my year-end payroll timing.

5 I was totally wrong about Claimyr. After posting my skeptical comment, my accountant went on vacation and I had an urgent question about my S-corp payroll deadline that couldn't wait. Got desperate and tried the service - connected to an IRS agent in about 25 minutes who actually gave me super specific guidance for my situation. The agent explained that my payroll needed to be dated AND processed before December 31st to count for the tax year, and specifically told me that with my payroll provider's holiday schedule, I'd need to submit it by December 16th at the latest. Would have completely missed the cutoff otherwise. Never thought I'd say this, but being able to actually talk to the IRS directly was worth its weight in gold.

22 One thing nobody's mentioning - consider running at least quarterly payroll instead of just one annual payroll at year-end. The IRS sometimes looks skeptically at S corps that only run payroll once a year since it doesn't resemble a typical employer-employee relationship. My accountant advised me to run quarterly to look more legitimate.

4 Has anyone run into issues with state payroll taxes and reporting deadlines being different from federal? I made this mistake last year and ended up with penalties because my state required payroll tax deposits more frequently than I realized.