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    bobsss's Avatar
    bobsss Posts: 2, Reputation: 1
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    #1

    Feb 16, 2011, 07:12 AM
    LLC and 1099
    I have an llc with 3 members, two were paid a salary (not a draw); does the llc issue them a 1099-misc for their portion of the salary?
    MLSNC's Avatar
    MLSNC Posts: 158, Reputation: 17
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    #2

    Feb 16, 2011, 01:24 PM
    Based on my understanding--if the LLC is a partnership then the partners' income is reported on the K-1. If the LLC is taxed as a corporation then they would receive a W-2. For a partnership the "salary" portion would be reported as a guaranteed payment and deducted to determine the income to be split by the partners. The guaranteed payments are reported separately on the K-1, but the partner is taxed on the guaranteed portion plus their share of the profit.

    You would not issue a 1099 for the payments.
    bobsss's Avatar
    bobsss Posts: 2, Reputation: 1
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    #3

    Feb 16, 2011, 01:28 PM
    Makes sense, I've read in a number of places to make sure salary is repored as salary (from the LLC) and not the draw. It also makes sense that the K1 would act as a report of income. Thanks much
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