Please clarify what do you mean under "business (sole prop) incorporated"
What is your business legal status?
Is it C-corporation? S-corporation? LLC? Partnership? other?
Please explain...
Ok - it is clear now.
So - you have following income:
self-employment income for 6 months - which to be reported on the schedule C
wages income - from Was - will be reported on the form 1040 line 7
distribution from S-corporation - from K-1s - will be reported on the schedule E part II - http://www.irs.gov/pub/irs-pdf/f1040se.pdf
The IRS requited for S-corporation to pay reasonable wages to shareholders.
Employee wages are subject to FICA tax (Social Security and Medicare) 15.3% - half of which is paid by the employer and half should be withheld from employee's wages.
FICA taxes should be remitted to the IRS and employment tax return - Form 940 - is required.
If you did not do that - you need to do as soon as possible and most likely will owe penalties.
Let me know if you need any help.
If you would not separate wages and dividends - that is most likely what the IRS treatment would be...
The IRS in case of audit will not determine your "reasonable wages" - that is your responsibility.
If you area and in your occupation employees are usually paid $15 per hour - that would be considered a reasonable wages.
Here is IRS view on Wage Compensation for S Corporation Officers
The income above reasonable wages may be distributed as dividends - and it will not be subject of FICA - that is a main tax advantage of having S-corporation.
Tax Preparer
Taxes, Immigration, Labor Relations