A2A.First of all, you do not “incorporate an LLC into a S-corporation”. If you own an LLC, and you elect to be treated as an S-corporation for tax purposes, you file IRS Form 2553, Election by a Small Business Corporation. If you file by the 15th day of the third month of your tax year (March 15 for an LLC operating on a calendar year basis), the election becomes effective in that year, otherwise the election becomes effective during the next year. Note that an LLC cannot elect S-corporation treatment unless all owners are US citizens.Once the election to be treated as an S-corporation becomes effective, the company files a corporate tax return, IRS Form 1120S, U.S. Income Tax Return for an S Corporation. This return is filed using the corporate name and EIN. As part of the filing of Form 1120S, the company will create a Schedule K-1 for each owner that shows that owner’s share of the corporation's income and expenses. The K-1 will contain the Social Security number of each owner, and a copy of each K-1 is included in the 1120S. The LLC doesn't pay any taxes itself; Form 1120S is an information return only.Each owner reports the information from Schedule K-1 on his or her individual tax return, according to the Shareholder Instructions that are provided with Schedule K-1, The owners are responsible for the taxes on their distributive share of the LLC’s income, regardless of whether they receive a cash distribution or leave it in the company as retained earnings. The owners can deduct losses only to the extent that the loss doesn't exceed their basis in the company (where the basis is generally the amount of capital invested, adjusted for retained earnings and prior losses).Any owner that performs services for a company that elects S-corporation treatment must be paid a salary (with payroll taxes deducted and paid to the IRS during the year) that is reasonable for the services provided -usually this should be what you would have to pay an outsider to do the same thing, although there is some flexibility. The intent is to ensure that income intended as compensation for services is taxed appropriately as compensation rather than being shielded in the form of a (usually) non-taxable distribution.As Andrew Weill notes, this isn't a decision that you should be making without a thorough understanding of the implications, and I strongly suggest that you engage a qualified professional who can advise you how to proceed.