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Okay so I am an independent contractor for a direct sales company. At the end of 2014 I got my EIN# and did the paperwork to file as an SCorp beginning 1/1/15. The way this was supposed to work is that my SCorp would be the independent contractor working for the direct sales company, and I would be an employee working for my SCorp. I have been writing myself a paycheck from my SCorp every 2 weeks and making all of the correct witholding (Fed/Fica) tax payments as the business. Then in Jan 2016 I would give myself a W2 from my SCorp and my SCorp would receive a 1099 from the direct sales company.
Problem -- I just found out that the direct sales company never switched the stuff over, so now when they issue the 1099 in Jan 2016 it will be for me personally and not the SCorp, meaning my SCorp has made $0.00 for 2015 but has paid in $15,000 in payroll taxes YTD.
I know that I can close my SCorp, which is what I plan to do ... but what about all of the money that has been paid in as withholding payments ... Will they be able to just completely reverse my SCorp Election and then apply all of the money that has been paid towards my personal taxes as estimate payments?
Please help! I don't have a clue what to do and have been on hold for over an hour for 3 days in a row now with the IRS.
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