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Business & farm
You report $14,000 of ordinary income and $5,000 of W-2 income on your current year return. The amount that you distribute to yourself is not relevant; you are still taxed on both amounts.
The IRS can always recharacterize some or all of the $14,000 if they do not believe the $5,000 is a "reasonable salary" for the services you perform for the corporation.
‎February 7, 2023
7:35 AM
938 Views