W2s for LLC members when LLC filing as S-Corp

[Pam Kemp]

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

[veritas]

Not allowed

They would be required.

[JoshinNC]

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.

[winnie]

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.

[John of PA]

Yes

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

[veritas]

[QUOTE=JoshinNC;48583]

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.