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New Member
posted Jan 24, 2021 5:29:17 AM

Does a S corporation make you self employed or not if you pay yourself from it?

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1 Best answer
Level 13
Jan 24, 2021 7:45:57 AM

As a shareholder in an S corporation, you should pay yourself as any other employee; receive wages and a W-2. 

In addition, any earnings that pass through to an S corporation shareholder are not subject to self-employment tax.

4 Replies
Level 13
Jan 24, 2021 7:45:57 AM

As a shareholder in an S corporation, you should pay yourself as any other employee; receive wages and a W-2. 

In addition, any earnings that pass through to an S corporation shareholder are not subject to self-employment tax.

Expert Alumni
Jan 24, 2021 11:04:05 AM

No, a shareholder in a corporation does not make you self-employed.  

  • As shareholders, owners receive distributions from the profits of the company.
  • Some S corporation owners work in the business, and they are taxed as employees for this work and receive a W2

For additional information regarding compensation from an S Corporation where you are a shareholder, please see: IRS: Procedures for Compensation

Level 15
Jan 24, 2021 11:49:53 AM

Please also read these re S Corps:

S Corporations | Internal Revenue Service (irs.gov)

Level 15
Jan 24, 2021 11:52:06 AM

Do you need to prepare the S corp return?  It is not self employment and does not go on Schedule C.

 

You need Turbo Tax Business.

The small business program (TT Business) is for 1120 Corporation, 1120S Corp, 1065 Partnership or 1041 Estate/Trust returns and will not do your personal 1040 return.   It  is a separate program from the Desktop Home & Business program or the Online Self Employed version.

 

Turbo Tax Business  is not available to do online or on a Mac.  You can buy the Window's version here.  And you can have both TT Business and TT Home & Business (or any personal version) installed on  your computer at the same time.

https://turbotax.intuit.com/small-business-taxes

 

Desktop Windows System Requirements

https://ttlc.intuit.com/community/system-requirements/help/minimum-system-requirements-for-turbotax-windows-software/00/26175