Self employment tax income flowing from 1120S K-1

[Buckeye]

How do you get ordinary business income on a K-1 1120s to flow to Schedule SE?

[apex]

Ordinary income from 1120s is not subject to SE.

[Just-Lisa-Now-]

Your client should have received a W2 from the S-Corp for his wages/earned income.

[Buckeye]

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.

[Buckeye]

More specifically, line one is subject to ss tax.  It is ordinary farm business income.

[sjrcpa · Accepted solution]

You were told wrong. That would be true (most likely) if it was a partnership K-1.

[Buckeye]

Yes you are right. I just received a call from CPA firm correcting themselves.

[HARTLEY]

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.

[IRonMaN]

"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.

[Just-Lisa-Now-]

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.

[IRonMaN]

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.