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Jason M. Tyra, CPA
Jason M. Tyra, CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 178
Experience:  Principal at Jason M. Tyra, CPA, PLLC
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Compensation of officers, line 12 of form 1020 captures

Customer Question

compensation of officers
JA: Thanks. Can you give me any more details about your issue?
Customer: line 12 of form 1020 captures compensation of officers, we are a small company ($88k gross sales) and paid minimal compensation (approx $2k to each of 2 partners) for specific company related tasks we are not required to complete a Form 1125E but want to ensure we capture the deduction correctly and any associated forms are distributed to the partners who were paid
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Submitted: 1 year ago.
Category: Tax
Expert:  Jason M. Tyra, CPA replied 1 year ago.

Hi There:

It looks like you are referring to Form 1120-S, the S Corporation return. If that is correct, then each shareholder (partner) should receive a K-1 form AND a W2 form for the amount paid out as compensation. The K-1 form shows the residual income of the company and various other tax items that are reported at the shareholder level, while the W2 shows just the salary payments. The salary payments are deductible from taxable income, so the same amount isn't taxed twice.