How do you get ordinary business income on a K-1 1120s to flow to Schedule SE?
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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.
You were told wrong. That would be true (most likely) if it was a partnership K-1.
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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.
