My wife and I have a SCorp, she receives 1099s in the business and her name. Do we claim a salary for her which and if so does the business need to supply a 1099??

goldnson — Thu, 06 Jun 2019 05:25:47 GMT

She receives payments for consulting work and the entities that pay provide her with 1099's. For the S Corp she has used monies as a salary. My question is the SCorp required to provide her with a 1099 too? Additionally she and I file our personal taxes as married filing jointly.

The S-Corp will complete it's own tax return (form 1120 S...

Fern — Thu, 06 Jun 2019 05:25:49 GMT

The S-Corp will complete it's own tax return (form 1120 S).  The S Corp will include all 1099-MISC forms received in it's name as income.

The S-Corp must designate a "reasonable" amount of it's income as wages.  This is required because the IRS wants to make sure that you are reporting a "reasonable" amount as self-employed wages and paying a "reasonable" amount of self-employment tax. What constitutes "reasonable" is a gray area.  See https://turbotax.intuit.com/tax-tools/tax-tips/Small-Business-Taxes/How-an-S-Corp-Can-Reduce-Your-Self-Employment-Taxes/INF22938.html for more discussion.

After recording all expenses, and wages, the S-Corp must distribute any remaining income it's shareholders.  That is done through a Form K-1.

On your personal income tax return, you will include any wages paid by the S-Corp (either 1099 MISC or W-2) paid to your wife.  You will also include the Form K-1 in your tax return.

topic My wife and I have a SCorp, she receives 1099s in the business and her name. Do we claim a salary for her which and if so does the business need to supply a 1099?? in State tax filing

My wife and I have a SCorp, she receives 1099s in the business and her name. Do we claim a salary for her which and if so does the business need to supply a 1099??

The S-Corp will complete it's own tax return (form 1120 S...