xuan150279
Level 3
12-07-2019
01:52 AM
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It is the first year of SCorp, it is possible to get 1099 MISC as a compensation to be on Schedule C? and have deduction expenses on the Schedule C?
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TaxGuyBill
Level 15
12-07-2019
01:52 AM
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Salary goes on a W-2, not a 1099-MISC.
There should not be a Schedule C.
Any expenses should have been (1) paid they corporation (so the deduction would be on corporate return) or (2) paid by the shareholder then reimbursed under an Accountable Plan (so the deduction would be on the corporate return). Other possibilities is that shareholder paid the expense and it is treated as a capital contribution or loan.
xuan150279
Level 3
12-07-2019
01:52 AM
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Thank you. If owner has already got a 1099 MISC as a compensation, It is recharactized as a Distribuiton for the first year according to IRS and where can I put it in SCorp?
qbteachmt
Level 15
12-07-2019
01:52 AM
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@xuan150279
You've asked this a number of times, and every answer has been the same:
There is never a 1099-Misc issued to the Shareholder of their own entity.
The Shareholder working for the entity gets paid through Payroll. That is Required.
You need to Unrecharacterize the distribution and File payroll reports and pay taxes late for 2018 to comply with the rule of required Reasonable Compensation for that person.
The S Corp files taxes using 1120S. There is no Sched C.
You've asked this a number of times, and every answer has been the same:
There is never a 1099-Misc issued to the Shareholder of their own entity.
The Shareholder working for the entity gets paid through Payroll. That is Required.
You need to Unrecharacterize the distribution and File payroll reports and pay taxes late for 2018 to comply with the rule of required Reasonable Compensation for that person.
The S Corp files taxes using 1120S. There is no Sched C.
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abctax55
Level 15
12-07-2019
01:52 AM
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It's only March....do the W-2 & payroll tax forms (state included) even tho delinquent. It's the "right" way to handle it.
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