<docrock711cc[at]hotmail.net> wrote:

- quote -

That works.

- quote -

Well....... $45,000 in wages. A $50,000 loss on the S-Corp.
Without knowing the rest of your situation, it looks like a
small loss so far.

The difference is that when you paid yourself a wage, you
deducted payroll taxes, so you are likely receiving a refund
of taxes withheld.

BTW, you did remember to deduct the employER share of
payroll taxes on your 1120-S, didn't you? Do you have a NOL
ot carry forward or back?

- quote -

You would enter whatever result you get on the K-1 form
attached to your 1120-S. You might consider runnig your
situation past someone just to see that you didn't miss
something.

Bryan

--
Bryan Kellar, EA
Oregon Tax Help, Inc. -- Portland, Oregon
www.oregontaxhelp.com
www.canadatax.org

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docrock711cc[at]hotmail.net wrote:

- quote -

Of course the corporation gets a deduction for your $45,000
salary on the 1120S. Otherwise, you would be paying tax
twice on that $45,000 -- once as salary, and again as S
corporation income.

The extent to which the S corporation's loss, flowing
through to you, can be deducted from other income on your
return depends on factors such as your tax basis in the
corporation. It sounds as though you are active in the
corporation's business, so the passive loss limitations
should not apply in this situation.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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"docrock711cc[at]hotmail.net" <docrock711cc[at]hotmail.net> wrote:

- quote -

Essentially you have a net zero income from the S
corporation ($50K salary less $50K K-1 loss). All it cost
you was payroll taxes. If things are looking up now (or
might before the end of summer), you might want to put the
corporate tax return on extension so that you could
contribute to a SEP based on the salary (if you have enough
other income so that your tax rate is at least 25%).
Otherwise, if you have the funds, put $3k into a Roth IRA.

What you put on Schedule E is the information from the
Schedule K-1 of the corporation.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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"docrock711cc[at]hotmail.net" <docrock711cc[at]hotmail.net> wrote:

- quote -

Clearly you did not do something right. For one thing, you
don't simply use page 1 of the s-corp return and dump the
bottom line number onto your 1040. Which begs the question,
did you do the s-corp return properly, and I suspect not.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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docrock711cc[at]hotmail.net wrote:

- quote -

I think you typoed "Schedule E, page 2."

- quote -

You should report the numbers that are on your K-1 on SchEp2
(or elsewhere, as appropriate), and the number in Box 1 of
your W-2 on Line 7. I think entering the W-2 will fix your
"problem."

Phoebe

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You are doing it right. deduct the entire loss. Actually
it's offset by your salary income so your taxes shouldn't
"jump".

ed

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Here's my situation/question:

I'm a computer programmer who's listed as an S Corp. Last
year, I had NO clients and earned NO income. But I continued
to pay myself a salary up to August since I had money in my
corporate account. I paid myself $45K (1120S compensation of
officers) and had $5K of other expenses.

Here's the question: When I go to my 1040 and enter $50K (as
a loss) on line 17 (Rent, royalty, partners, S Corp), my
refund numbers jump in such a positive direction that it
makes me think that I'm doing something seriously wrong.

When reporting corporation losses do I include salary paid
to officers (which is just me)? Should I only enter $5K
instead of $50K on that line?

Advanced thanks to whoever chooses to respond.

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