USA Salary Draw for Sole Proprietorship - California

[bbowens]

Salary Draw for Sole Proprietorship - 1040

Hi All,
I'm a sole proprietor (consulting), and in 2012, my earned income dropped to such a point that I was unable to take an IRA deduction. So, for 2013, I started paying myself a small salary, enough to be able to fund my IRA and take the deduction.
I've not yet figured out where or how to claim this as income, though. I'm using TaxAct Deluxe desktop software, and I'm awaiting their feedback on this.
In the meantime, I was hoping that someone here would want to give me some guidance.

Thanks in Advance,

Brad

PS--I should mention that although I'm in California, it's the Fed return that I'm looking for input on

 

[kirby]

As sole proprietor there is no "salary" for you (unless you mean that you actually do have a corporation that pays you ). Your earn income by performing your sales or services and that is your income. Else you are just moving money from one pocket to the other. Accounted for as a "draw" on your ownership account. Time to see an accountant to help guide you through this.