Discussion:S Corporation
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Discussion Forum Index --> Tax Questions --> S Corporation
| 6 March 2006 | |
| I have income from my 's' Corporation and i did not collect wages, please advise me can i pass through to K-1 or the income is subject to Social Security. I would really appreciate if you could refer me to the publication to get more details.
Regards | |
| 6 March 2006 | |
| All income/expenses flow through from your k-1 to your individual tax return. S corporation profits are not deemed self employment, but are treated as other income on your 1040. Distributions made to you from the S corp may also be taxed to you and the IRS may treat your distributions as salary to the s/h/officer. See publication 542. | |
| 6 March 2006 | |
| keep in mind, IRS is looking closely at S-Corps. There is a tremendous surge of the formation of S-Corp in the past 18mons. If there is an individual who performs the majority of the services for the Corp, you must make guaranteed payments. THese guaranteed payments will be subject to payroll taxes and a w-2 will be issued.
This is still a tremendous benefit to the individual. the salaries paid are usually less than the net profits. good luck | |
| 6 March 2006 | |
| Amen to Winner. If this is the initial year, maybe you're ok dodging some compensation subject to SS. If you didn't bother to file payroll tax returns, at a minimum, create a 1099 MISC for some comp that will reduce the profit. Take a look at www.salary.com for a good site to determine reasonable salary, which is the IRS requirement for active shareholders. | |
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