How do you get ordinary business income on a K-1 1120s to flow to Schedule SE?
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You were told wrong. That would be true (most likely) if it was a partnership K-1.
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Ordinary income from 1120s is not subject to SE.
Your client should have received a W2 from the S-Corp for his wages/earned income.
I was told by the CPA firm that prepared the 1120 S that ordinary business income on line 1 of K-1 is subject to ss taxes.
More specifically, line one is subject to ss tax. It is ordinary farm business income.
Yes you are right. I just received a call from CPA firm correcting themselves.
What if I want to have my profit to go on an SE and to pay social security tax? I don't have much paid in to social security and did not take payroll.
"What if I want to have my profit to go on an SE and to pay social security tax?"
Then you need to pay yourself a payroll check.
What's the point of an SCorp if youre going to pay SE tax on your profit...you may as well have stayed a sole proprietor.
That's the problem. A lot of folks take advice from their barber's neighbor's cousin and create Sub S entities when they should have been a sole proprietor.