Started S corp in 2019; do I need to issue a W2?

[legaleagle]

I started a new company in 2019.  I formed it and elected to be an S Corp.  I am the President of the company and the only employee.  I didn't make much money but I did file the quarterly 941 reports and have issued a K1 to me showing some income based on what I filed on the 941.  I'm assuming for 2019, I can just report the K1 and take into account the monies I paid each quarter on the 941 as on account payments.  But do I also need to issue myself a W2?  If that's the case, then it seems like I'm duplicating income.  My understanding is that I must produce a K1 but that I don't have to produce a W2.  

[Anonymous_]

As an employee of your S corporation, you are required to pay yourself a reasonable salary. However, you should not duplicate whatever salary you received and reported on your 941 filings on your K-1.

You must issue yourself a W-2 if you withheld any income, social security, or Medicare tax, the corporation paid $600 or more in wages, or would otherwise have had to withhold income tax.

See https://www.irs.gov/instructions/iw2w3#idm140445852731920

Therefore, you are required to file a W-2 for the salary you received from the corporation and also a K-1 to report the ordinary business income (loss) of your S corporation (along with other items of income, gain, credits, et al). 

You might want to seek guidance from an income tax professional since this is your first tax year with the S corporation and the initial filings are critical.

[legaleagle]

Thanks for the reply.  Just to flesh it out further.  Let's assume I paid myself $400.00 a week and filed the 941 making quarterly tax payments on that amount ($4800) each quarter.  Thus, my W2 would reflect $19,200 for the year.  I would report the $19,200 as income.  But if my K1 shows $20,000.00, most of that $20,000 would be for income that I paid myself that I reported on the W2.  Am I double taxing myself at this point?  It just sounds disingenuous to have to show both things as income when I only had one income.

[Anonymous_]

@legaleagle Please do not forget that the (hypothetical) $19,200 reported on the W-2 would be a deduction for the S corporation, so the $20,000 would not include the $19,200 (the latter figure having reduced the S corporation's income that would be passed through on your K-1).

[legaleagle]

Thanks.  That makes sense.  I have the Turbo Tax for Business software.  Would it automatically account for that or do I have to the calculation and deduct that from what is generated on the K1?

[Anonymous_]

---

@legaleagle wrote:

...Would it automatically account for that or do I have to the calculation and deduct that from what is generated on the K1?

---

The program will automatically deduct the amount but you have to enter the figures in the Compensation and Benefits section (see screenshot).

[legaleagle]

Great.  Thank you.