Salary payment to shareholder-100% owner of SCorp re-charactized as distribution. If the owner receives 1099 MISC as a compensation, it will have expenses on Schedule C?

Forum|Forum|6 years ago
December 7, 2019
2 replies
23 views

It is the first year of SCorp, it is possible to get 1099 MISC as a compensation to be on Schedule C? and have deduction expenses on the Schedule C?

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Best answer by TaxGuyBill

Salary goes on a W-2, not a 1099-MISC.

There should not be a Schedule C.

Any expenses should have been (1) paid they corporation (so the deduction would be on corporate return) or (2) paid by the shareholder then reimbursed under an Accountable Plan (so the deduction would be on the corporate return). Other possibilities is that shareholder paid the expense and it is treated as a capital contribution or loan.

T

TaxGuyBillAnswer

Level 15

Salary goes on a W-2, not a 1099-MISC.

There should not be a Schedule C.

Any expenses should have been (1) paid they corporation (so the deduction would be on corporate return) or (2) paid by the shareholder then reimbursed under an Accountable Plan (so the deduction would be on the corporate return). Other possibilities is that shareholder paid the expense and it is treated as a capital contribution or loan.

X

xuan150279Author

Level 4

Thank you. If owner has already got a 1099 MISC as a compensation, It is recharactized as a Distribuiton for the first year according to IRS and where can I put it in SCorp?

abctax55

Level 15

It's only March....do the W-2 & payroll tax forms (state included) even tho delinquent. It's the "right" way to handle it.

HumanKind... Be Both

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