<p>My husband is self-employed in a S corp partnership with his brother. He receives a w-2 from his salary and also a compensation from the profits of the business. My question revolves around the compensation he receives. The S corp tax return lists income and deductions. Compensation of officers is a federal deduction. Therefore, on line 17 of our PERSONAL tax return the net income from his business is different than his compensation checks. Do we need to also put this compensation under OTHER UN-TAXED income. His compensation is greater than the bottom line business income since the compensation of officers is a federal allowable business deduction.</p>
<p>I hope I have explained this well enought for someone to understand.</p>