I think you're confusing basis distributions and ordinary business income.
- Distributions come from your ownership basis in the S-Corp and are reported on line 16 of the K-1.
- Ordinary business income comes from the operations of the S-Corp (sales & services). Your share is reported on line 1 of the K-1, included in your 1010 and taxed there as income.
To enter the K-1 from your S-Corp into your personal 1040 return, please follow these steps:
- Click on Federal Taxes > Wages & Income [In TT Self-Employed: Personal > Personal Income > I'll choose what I work on].
- Under S-corps, Partnerships, and Trusts [in desktop: Business Investment and Trust Income], click on the Update box next to Schedule K-1.
- On the Tell Us About Your Schedules K-1 screen, click on the Start/Update box next to S corporations (Form 1120S).
- If you have already entered K-1 SCorp information, you will see the SCorp. K-1 Summary screen. Click Add Another K-1 to enter your information (or click on Edit to continue with the existing form entry).
- If you haven't started enter K-1S information, continue through the screens, entering the requested information.
