Answered: Shareholder Compensation on Form 1120S

lr · ‎03-14-2019

S corporations that have less than $500,000 in total receipts. When I record on Form 1120S Smart Worksheet Line B for the shareholder compensation not on Form 1125-E, ProSeries does not show a deduction the shareholder compensation. Line 21 Ordinary Business Income does not reflect the shareholder/officer compensation. For ProSeries to reflect compensation on the correct line, I must put the compensation on Line 7 of the 1120S that is for Form 1125-E and complete Form 1125-E when not required to do so. Why? Is this an upcoming software fix?

IntuitCharlene · ‎03-14-2019

I was reviewing the Shareholder-Employee Compensation Smart Worksheet and line B does indicate to See Tax Help. Based on the help center line B will only impact the tentative business income limitation to determine the allowable Section 179 Depreciation Deduction.

For the Compensation to show on line 7 you would just manually enter it on line 7 if the 1125-E is not required.

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IntuitCharlene · ‎03-14-2019

I was reviewing the Shareholder-Employee Compensation Smart Worksheet and line B does indicate to See Tax Help. Based on the help center line B will only impact the tentative business income limitation to determine the allowable Section 179 Depreciation Deduction.

For the Compensation to show on line 7 you would just manually enter it on line 7 if the 1125-E is not required.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Accept as solution" and then just changing the Accept as solution to Mark as Best Answer, mine gets cutoff, so it is too long. I changed mine to the following and it fits. -->**Say "Thanks" by clicking the thumb icon in a post
**Click "Mark as Best Answer " to mark the post that answers your question.

Shareholder Compensation on Form 1120S

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