Question

1 employee/owner S-corp SEP max contribution limit who gets 1099 from customer. How to determine net earnings since the S-corp income goes to personal income tax return.

Forum|Forum|5 years ago
December 28, 2020
2 replies
0 views

Can i contribute 25% of total amount in 1099 (i.e. amount in 1099 is basis for "net earnings" or "compensation") or do i need to subtract business expenses from them?

TurboTax Self Employed Online

A

Anonymous_

Employee

Duplicate.

See I'm self-employed, SEP max limit is 25% of net ear... (intuit.com)

D

dmertz

Employee

The S-corp shareholder's compensation is the amount reported on the shareholder's W-2 from the S corp. It's what the S corp paid the shareholder in wages or salary.

S corp shareholders receive a W-2, not a Form 1099-NEC or 1099-MISC. S-corp shareholders are employees of the S corp. They are not self-employed.

If this is your first year having an S corp, you should get professional help. Making mistakes with an S corp can be quite costly.