topic Re: COGS Question in Business & farm

COGS Question

Michael_Earl — Fri, 28 Feb 2020 21:59:20 GMT

Why are my GOGS wages showing as w-2 wages on my 1120s forms? These were 1099 wages.

Re: COGS Question

DawnC — Fri, 28 Feb 2020 23:29:54 GMT

There is no such thing as 1099 wages. The amounts you paid to independent contractors should be recorded as contract labor expense (can be a part of COGS). Wages are paid to employees.

Re: COGS Question

Michael_Earl — Sat, 29 Feb 2020 00:16:27 GMT

Thanks, I did know that. But in TurboTax Business, it's also reporting those dollars on my K-1 as W-2 wages.

Re: COGS Question

DianeC958 — Sat, 29 Feb 2020 15:51:16 GMT

If you are referring to the information for Box 17 on your K-1 this is the information needed to report amounts needs to figure the possible Qualified Business Deduction.

The amounts your reported for wages are correct to be reported as part of your K-1.

@Michael_Earl

Re: COGS Question

Carl — Sat, 29 Feb 2020 16:25:00 GMT

Just a guess here. But it sounds to me like you reported wages in COGS that you already reported as W-2 wages paid to an employee or 1099-MISC paid to a contractor. That's double-dipping and will cause the issue you are experiencing now. If you've already reported the wages to an employee on a W-2, then you do not enter them in COGS.

If you're already reported payments to a 1099-MISC contractor outside of COGS, then you do not report it again in COGS.