Tax Year Prior to 2020: How report officer's compensation?

Forum|Forum|7 years ago
June 4, 2019
9 replies
50 views

I own an LLC. It's registered with the IRS as an S-Corp elect. I am the only employee. I pay myself a salary by paycheck with payroll deductions etc. using Intuit online payroll. I also take a cash draw. I understand my draw is considered officer's compensation and is considered wages. Where on my personal tax return do I input the draw amount? I produced a Schedule K and input that into my personal tax return and the Schedule K shows the draw amount. But I don't see a place to input the draw amount in Turbotax to record as income/wages. Thanks

TurboTax Home & Biz Windows

WillK

Alumni - Intuit

You would report the wages you pay yourself on the W-2 under the officer wages information. As for the draws, they are considered compensation, but not in the way you are thinking about it. The draws that you have taken from the company should be reported on the K-1, which when you report the K-2 on your personal return the draw will be reported.

You should be using at least Turbo Tax Premier to report the K-1. To report your K-1:

1. Log in to your account

2. Click on continue my taxes

3. On the left-hand side is the menu bar, click tax tools

4. Click tools

5. Click Topic Search

6. Enter in 1099-MISC

7. Click go

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IamIntractable

Level 6

@WillK Your answer does not address how to respond to the prompt that appears during e-filing asking for:

claiming officer compensation

There are no instructions and there is enough information in the return (2019) for TT to figure this out. However,

as the original poster indicated. I too paid myself a salary and then distributed the remaining profit over the year as needed. Since this is a passthrough, leaving the money in the business account or taking it out makes no difference. I pay tax on it as the sole owner/employee.

SO I suspect the prompt during e-filing is about being sure I took w2 compensation. The wording on the page is terrible.

Please provide clear guidance. Is any of this money "Officer Compensation" in this scenario?

I believe the answer is no.