Are partners considered employees of a partnership or are they considered self-employed?"

 

You asked about an S Corp.

 

You seem to want to debate something with Peer users, who responded to your initial question for how you asked it. You clearly misunderstood that the Use it taxable, as Fringe, and is considered by the IRS as a form of compensation for working there. Your initial belief for 80/20 isn't wrong; not including the other 20% is what was wrong. Not including it as Payroll was wrong. It doesn't need FIT withheld, but it is taxable under FICA.

 

If you intend to debate the intent of the IRS and Congress, we are not the right opposing counsel for that discussion. We can be audience to your own internal debate, of course.