Where to Enter Officer Compensation in Lacerte
Enter each officer and their pay on screen 2, Officer Information. Lacerte adds them up and carries the total to Form 1120S page 1 line 7. Screen 15, Ordinary Deductions, has a Compensation of officers [O] field, but it is an override that replaces the calculated figure rather than the normal place to enter it.
- Open screen 2, Officer Information
- Enter compensation per officer
- Only use the override if you must
- Check the officer schedule prints
- Detail
- Screen 2, Officer Information
- Officer Compensation
| Trial balance account | Lacerte screen and field | Lands on |
|---|---|---|
| Officer compensation | Screen 2, Officer Information, Officer Compensation | Form 1120S page 1 line 7 |
| Officer compensation, total override | Screen 15, Compensation of officers [O] | Page 1 line 7, overriding the calculation |
| Salaries and wages, non officer | Screen 15, Ordinary Deductions, Salaries and wages | Page 1 line 8 |
| Shareholder health insurance | Through payroll and the W-2, not the insurance account | Included in officer wages |
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Try it freeWhere to Enter Officer Compensation in Lacerte on a trial balance
| Acct # | Account | Debit | Credit |
|---|---|---|---|
| 1000 | Cash | 42,800.00 | |
| 1200 | Accounts receivable | 68,500.00 | |
| 1300 | Inventory | 55,000.00 | |
| 1500 | Equipment | 145,000.00 | |
| 1510 | Accumulated depreciation | 47,500.00 | |
| 2000 | Accounts payable | 28,400.00 | |
| 2100 | Accrued expenses | 9,200.00 | |
| 2400 | Notes payable | 92,000.00 | |
| 2450 | Due to shareholder | 15,000.00 | |
| 3000 | Common stock | 10,000.00 | |
| 3900 | Retained earnings | 86,300.00 | |
| 3950 | Shareholder distributions | 52,000.00 | |
| 4000 | Gross receipts | 612,000.00 | |
| 5000 | Cost of goods sold | 318,000.00 | |
| 6000 | Salaries and wages | 88,000.00 | |
| 6050 | Officer compensation (the account this page is about) | 72,000.00 | |
| 6300 | Depreciation expense | 21,500.00 | |
| 6900 | Other operating expenses | 37,600.00 | |
| Total | 900,400.00 | 900,400.00 |
Screen 2, not the deductions screen
The instinct is to look in deductions, because that is where wages are. Officer compensation is entered one officer at a time on screen 2, Officer Information, and Lacerte computes the total and carries it to page 1 line 7.
Screen 15 does have a Compensation of officers field, and it is marked [O] for override. Using it replaces whatever the officer detail computed. That is occasionally what you want, when a single total is all you have, and it has a cost: the override changes the page 1 figure without feeding the officer level detail that Form 1125-E reports.
Why the detail is worth entering properly
Form 1125-E asks per officer for the name, the percentage of time devoted to the business, the ownership percentage and the compensation. On an 1120S, the form is required once total receipts reach $500,000.
The time devoted column is where a thin story becomes visible. An officer at 100% of time with minimal compensation, in a profitable company making distributions, is exactly the pattern the reasonable compensation rules exist for.
What belongs on the line, and what does not
In: gross W-2 wages to officers, including bonuses.
Not in:
- Distributions, which are equity and belong on the Schedule M-2 screen
- Personal expenses paid by the company, which are distributions or a constructive dividend rather than pay
- Non officer wages, which belong in salaries and wages on screen 15
- Partner payments on a 1065, which are guaranteed payments and never officer compensation
Shareholder health insurance for a more than 2% S corporation shareholder is a special case. It is included in W-2 wages for income tax purposes, is not subject to Social Security and Medicare, and is deducted by the shareholder personally. It belongs in the wage figure through payroll, not left sitting in an insurance expense account.
The check before filing
Officer compensation on page 1 should agree with the officers' W-2 wages. If the line is zero on a profitable S corporation whose shareholder works in the business, the issue is not a Lacerte input question, and it is worth raising with the client before the return goes out rather than after a notice arrives.
Tax return treatment
| Form | Line |
|---|---|
| Form 1120S | Page 1 line 7, with Form 1125-E at total receipts of $500,000 or more |
| Form 1120 | Page 1 line 12, with the detail on Form 1125-E |
| Form 1065 | Not applicable. Partner payments are guaranteed payments |
Common questions
What screen is officer compensation in Lacerte?
Screen 2, Officer Information. Enter the compensation for each officer there and Lacerte carries the total to Form 1120S page 1 line 7. Screen 15 has a Compensation of officers [O] override, which replaces the calculated total.
Should I use the screen 15 override or screen 2?
Screen 2, unless you only have a single total and no officer detail. The override changes the page 1 amount without feeding the per officer detail that Form 1125-E reports, so the form and page 1 can end up telling different stories.
When is Form 1125-E required on an 1120S?
When total receipts reach $500,000. It asks for each officer name, percentage of time devoted to the business, ownership percentage and compensation.
Where does shareholder health insurance go?
Into W-2 wages through payroll for a more than 2% S corporation shareholder, not into the insurance expense account. It is included in wages for income tax purposes, is not subject to Social Security and Medicare, and the shareholder deducts it on their own return.
Related answers
Go deeper
This page is the short answer. These articles work through the same ground in detail.
Last reviewed October 17, 2026.