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emaven1
New Member

K1S from S corp does not generate the Self employment tax. I know it has to be paid. But turbo tax tells me I don't have to pay any. How do I get to it?

Using turbotax premier Mac. 

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IsabellaG
Expert Alumni

K1S from S corp does not generate the Self employment tax. I know it has to be paid. But turbo tax tells me I don't have to pay any. How do I get to it?

Schedule K-1 from an S-Corp does not generate Self-Employment tax. If you are the owner of an S-Corp, you need to pay yourself wages from the corporation as compensation, and issue a W-2 for you as an individual. See this link to the IRS discussion of this issue, which comes up frequently:https://www.irs.gov/uac/wage-compensation-for-s-corporation-officers

The Internal Revenue Code establishes that any officer of a corporation, including S corporations, is an employee of the corporation for federal employment tax purposes. 

This is different for partnerships, which do generate Self-Employment tax

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3 Replies
IsabellaG
Expert Alumni

K1S from S corp does not generate the Self employment tax. I know it has to be paid. But turbo tax tells me I don't have to pay any. How do I get to it?

Schedule K-1 from an S-Corp does not generate Self-Employment tax. If you are the owner of an S-Corp, you need to pay yourself wages from the corporation as compensation, and issue a W-2 for you as an individual. See this link to the IRS discussion of this issue, which comes up frequently:https://www.irs.gov/uac/wage-compensation-for-s-corporation-officers

The Internal Revenue Code establishes that any officer of a corporation, including S corporations, is an employee of the corporation for federal employment tax purposes. 

This is different for partnerships, which do generate Self-Employment tax

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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emaven1
New Member

K1S from S corp does not generate the Self employment tax. I know it has to be paid. But turbo tax tells me I don't have to pay any. How do I get to it?

Thanks. I was confusing my son's taxes with my daughter's taxes. You are right. So now I have another question. She pays herself wages and part on the k-1. She has no SE tax. He works as an independent contractor, and the company gets 1099s. He then gets compensation from the company. He does pay SE tax. What is the difference in the tax rate paid for a given amount of compensation?. Is one way better than another?
IsabellaG
Expert Alumni

K1S from S corp does not generate the Self employment tax. I know it has to be paid. But turbo tax tells me I don't have to pay any. How do I get to it?

It's generally better to be paid as an employee, because if you are self-employed you are paying both the employee's and the employer's share of Social Security and Medicare taxes. But if you are the officer of an S-Corp, the corporation is paying the employer's portion, so it's all the same, since it's your company.
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