S corporation income only
I just received a message on Turbotax saying that I cannot put any money in my regular IRA account if I declared $0 income. All my income is a K-1 income, from a single member S corporation that I formed last year. And that I put down on form 1120 S
What retirement account options do I have?
Thank you.
Permalink Submitted by David Mertz on Wed, 2021-03-31 16:31
None of the income on a Schedule K-1 (Form 1120S) is compensation. Your compensation is the amount reported on your W-2 from the S corp. Your S corp is required to pay you a reasonable wage and report that on the W-2.
With no income reported on a W-2, you are not permitted any retirement contributions. However, since the K-1 shows income, you apparently need to correct the situation that your S corp has not paid you wages.
Permalink Submitted by Sal Esposito on Wed, 2021-03-31 17:12
And how I do I do this? Again, I am the only member in the S corporation, and I reported all of my 1099-NEC’s in my S corporation income, 1120S form. And the IRS just accepted it. It might be a CPA question … 🙂 Thanks again