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Business & farm
If your LLC is taxed as partnership and a member also works in the business, salaries are categorized as guaranteed payments, not W-2 income. Distributions refer to a return of capital or a payment for another reason.
Each partner will receive a Schedule K-1 from the partnership form 1065, which will report the guaranteed payments and partners' share of income and expenses. Reporting the schedule K-1s on your personal returns, will report both the salaries and partnership activity.
These terms can be used differently for the LLC vs the partnership, so if you are answering a specific question and this doesn't answer your question, please provide more details.
‎June 6, 2019
8:25 AM