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I run a business which is very unpredictable. A few months it may do no income and in 1-2 month it may make a 6 figure income.

I like the FICA savings advantage of s-corps. But I don't want to pay myself a salary if no income is coming in.

If my s-corp made 100k, is it possible to wait will December and in December I pay myself a 50k salary? and then turn off payroll again till December of next year?

  • Unless December is when you can more or less rely on pulling in 6 figures, where is the $50k coming from if not an account that you could pull from monthly? – chepner Apr 14 '18 at 13:57
  • December is not the month that all of that comes in. It could be anytime in the year. But I'd rather wait till the end so I have a close approximate amount. – david Apr 14 '18 at 14:06
  • It just seems like a much better idea to invest $50,000 into a salary account, draw from that each month, and top it off to $50,000 each time you have one of your big 6-figure periods. The question just sounds like "Can I run my business without adhering to a proper budget?" – chepner Apr 14 '18 at 14:13
  • @chepner the budget is always there. I have savings from prior years – david Apr 14 '18 at 14:29
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Yes, you can do this. For the “reasonable salary,” the IRS only cares about the total salary for the year, not your salary each month.

However, they want tax money on a regular basis. If you aren’t getting a salary with tax withheld for most of the year, you may need to be sending quarterly estimated tax payments.

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