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W2s for LLC members when LLC filing as S-Corp

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    W2s for LLC members when LLC filing as S-Corp

    If an LLC elects to be taxed as an S-Corp, are the members allowed to be paid W2 wages ?

    #2
    Not allowed

    They would be required.

    Comment


      #3
      Assuming there is a profit

      [QUOTE=veritas;48557]They would be required.[/QUOTE}

      In any year where there is not a profit the IRS would not expect a salary to be taken.

      Comment


        #4
        When an LLC elects to be taxed as an S corp (or whatever they elect), they are fully treated as that type of entity. So LLC electing to be treated as S corp = S corp taxes with all the reasonable wage requirements.

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          #5
          Yes

          Yes, I agree with all these answers. W-2 wages OK.

          Comment


            #6
            [QUOTE=JoshinNC;48583]
            Originally posted by veritas View Post
            They would be required.[/QUOTE}

            In any year where there is not a profit the IRS would not expect a salary to be taken.
            My reply was cryptic.

            If the shareholder/employees are taking funds out of the Corp for services performed, they must take wages even if they are losing money.

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