Had a potential client stop by yesterday. She had an 1120 from 2018. She's the only owner to this corp. I asked her if she had a W-2 issued to her. She said no! All her compensation was in the form of "draws" Question now is, how do I report her draws/compensation on her personal 1040 on proseries?
I responded your post over in the FB ProSeries Group...you posted here really early this morning so its gotten buried onto page 2, Im hoping my comment now will bump this back to the top so someone with corp experience will see it quicker.
You stated "only owner" but what you have is a Shareholder. What you didn't tell us is if this person did any work for the business that the corporation runs, or if there are any employees at all. You also mention "draws/compensation" but you have neither. There is no Draw; you might have dividends; you should read IRS guidance for how a C corp is different than S corp and partnership and sole proprietorship, to understand how these five things are not synonyms: Draw, Distribution, Guaranteed Payments, Compensation and Dividend. And read which word(s) applies to which entity type and under what specific conditions.
Whoever prepared the 1120 should have corrected this. We don't know how much money this involves, but it might be time to consider amending and correcting and everything is already late anyway, apparently, so that means penalty and interest and taxes, of course.
"How do I pay myself from a C corp?
There are two ways to pay yourself from your C corp: as an employee and through dividend payments.
If you’re involved in the day-to-day operations of running your C corp, then you’re considered a W-2 employee. Therefore, you should receive reasonable compensation for your work, which is subject to payroll taxes.
What’s reasonable compensation, you ask? The IRS has a bunch of rules you’ll need to follow, so chat with a tax adviser to ensure your compensation is in line with all federal requirements. Also, remember that your reasonable compensation must be paid before making nonwage distributions, like dividend payments."
"Level Up" is a gaming function, not a real life function.