Hello EMS0,
First of all, just to clarify, if you are paying yourself as a Single Member LLC, you don't need to issue yourself a 1099 or a W-2.
Secondly, if you are filing as S Corporation, you must give yourself reasonable compensation and issue a W-2 for that.
Reasonable Compensation is the amount that would ordinarily be paid for like services in your field. Reasonableness is determined based on all the facts and circumstances.
You may draw additional amount as a distribution, and not have to pay self-employment tax on that distribution.
Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful!
Have an amazing day.
AR (CPA 10+ years)
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
