Level 15

"how is ok schedule c is used for scorp owner,"

You are mixing up two different Tax Reporting Entities.

You are asking: "How can I drive a Truck and also drive a Prius at the same time for the same trip?"

Corporations are their own Entities; they get their own FEIN. The people that do the work for the Corporation are Employees; that means Payroll for these services.

A Person who is Self-Employed is working for themselves as the business. There is no separate Entity. This is a Sole Proprietorship. That is not the same as "only one employee" for a Corporation.

"and owner is not very involved with the business?"

Remember that a Corporation is its own entity. If there is only one employee of that Corporation, it isn't necessarily also a shareholder. If it is one employee and that is the only shareholder, that still counts as Two: the person and the Corporation. The person is Not the Corporation. In a Sole Proprietorship, you are your own business. "Not very involved" means you judge the value of Services Provided per the Reasonable Wage requirement.

"Is there a base dollar amount for s Corp gross sales to require paying owner a wage"

Stop using "Owner." That will help you stop being so confused.

Obviously, an employee who works over 2,000 hours for the year when the corporation only has $1,000 gross income, is going out of business very soon.

"in other words, above 15 k or 30 k or?"


Yes, the IRS would look at the performance of the business to determine reasonable wage. Example: The business has $10 million net income for purposes of the 1120-S K-1. That means payroll should be a lot more than Minimum Wage for that one employee. The IRS reserves the right to declare what Reasonable Wage should be. Example:

You take $25,000 as Wages and $500,000 as Distribution. The IRS can declare $525,000 is payroll, and accuse you of attempting to avoid payroll taxes with that split, which is illegal. You would need to prove this level of success can be done in the marketplace paying only $25,000 annual salary meets the Reasonable level.

"Level Up" is a gaming function, not a real life function.