Partner Receiving W2

Mom and Pop vape shop has been self-preparing form 1065 returns for 7 years. Husband and wife are 50/50 owners of MMLLC. Mom works in the shop, Pop is an employee elsewhere. They have employees and also do their own payroll. She has been including herself on payroll since 2012, receiving a K-1 and a W2 from the partnership each year.

Bother with a late election for S-Corp in 2018, or file another 1065 and elect S-Corp for next year?

You're mixing two issues. First, she should have no W2, of course. So that's that. Whether they should elect S is an entirely different discussion....

You're mixing two issues. First, she should have no W2, of course. So that's that.

Not quite. If they make the S election, then she should have the W-2. So, the two issues are not unrelated.

You're mixing two issues. First, she should have no W2, of course. So that's that.

Not quite. If they make the S election, then she should have the W-2. So, the two issues are not unrelated.

Yeah, that's where I was going. Sorry if that was not clear.

My opinion is that you should simply talk to them about which entities file W-2's for their owners and which don't, then ask how they would like to resolve the inconsistency. If they want to go S corp, then yes, go with a late election for as early as you can go.

Well, yeah, it is mixed issue! Geez. You're gonna elect S status merely because she has a W2. Please let me speak for the defense. Decide whether or not to be an S corp based on all the actually important factors! A W2 in error isn't one of them. Sorry, but....geez.