The S corporation status can be granted to a limited liability company or corporation. LLCs are commonly formed by owners that are termed "managers" or "managing directors" instead of officers.
Deducting officer compensation would entail deducting the W-2 expense of the "managing directors" or >2% shareholders.
The amounts of the W-2 are compensation, not the distributions. Compensation is subject to employment taxes (including Federal Insurance Contributions Act taxes) and distributions to shareholders are not.
@ericinmaryland
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
