“Small” is so relative… but if you’re talking a few thousand dollars in revenues, I would think you skip having a CPA involved. The fee you’ll pay a CPA will be several hundred dollars at least and when that’s noticeable value in your profit and loss statement, it’s probably a signal the CPA is uneconomical.

If you’re talking (and I know you’re not but just to generalize) a few hundred thousand dollars, a CPA probably makes sense.

In between these ranges, the guidelines given in the blog post are about as good general advice as we can give.

Also, my husband has been given stock options with his job, though he hasn’t purchased them yet…would we still need to have a CPA review our taxes?

You’re supposed to pay reasonable wages for your S corp (that’s the one really hard and fast rule). Gotta pay wages. Period.

But you should be able to pay those wages any time over the year. Even *all* in the fourth quarter–which would mean you might show zero wages for quarters 1, 2 and 3.

Note: IRS agents probably want you to do regular payroll, but that’s not really a law. More of a preference and a symptom that you’re really doing “real” payroll.

Accordingly, if you can pay enough wages in the fourth quarter to get your total to the to a good number, sure, that should work.

BTW, an awkward question: What if you paid zero wages in quarters 1, 2 and 3 and then can’t pay enough wages in quarter 4 to get your yearly total to a big enough number? Now you’re in trouble because you’ve inadvertently broken the one hard and fast rule.

What you may need to do in this case is re-categorize some of your quarter 3 shareholder distributions as wages and then file an amended quarter 3 941. This will trigger payroll taxes for quarter 3 of course. And trigger a penalty because you’ve paid the taxes late. But this is the price for breaking the rule.

BTW, you may need to go back to an earlier quarter if your “new” quarter 3 wages and your quarter 4 wages aren’t reasonable.

Final comment: One might at this point wonder about two other options: First, one might report all your wages in quarter 4 even through some were paid in earlier quarters. This is wrong accounting though and if you get caught you’ll get hit with the same penalties as if you do the accounting the way I describe in the preceding two paragraphs. (You might also risk your S corporation savings if the auditor gets cranky because you’re breaking the rules.) A second approach would be to do as good a job as you can do in your fourth quarter and hope that’s good enough… (E.g., maybe, yes, you should have paid yourself $40K for year but the biggest value you can push thorugh fourth quarter is $20K… so you do that… and then you hope for best.)