Hi, 

This is what I thought after reading on this topic but I was confused as an article I read stated that a shareholder-employee can choose to receive a salary as either an independent contractor or an employee.  Another article mentioned that an S-corp offers business owners three basic options for paying themselves: by salary, distributions, or both. But that the right choice depends largely on how the owners contribute to the company and the company's finances.  I also read that owners of S-corps who have a hand in daily operations fill two roles: one as a shareholder and another as an employee.  However, owners who do not oversee daily operations are classified only as shareholders, and the role an owner plays in their company directly affects how they get paid under the S-corp structure. 

I did not prepare the 1120-S tax form the customer used their tax accountant.  They wanted me to prepare their personal taxes claiming K1 and 1099-C, and the 1099-NEC (salary they got paid).