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História e Educação Colaborativa em Video Games. Esta é The Indie Story Week 03 Um blog em curso que narra o desenvolvimento de Pawcho Save the ABCs. Um jogo móvel desenvolvido por uma equipe independente de Vancouver que visa ensinar as crianças a escrever o alfabeto. Na semana passada falamos sobre mecânica, os blocos de construção de um jogo e apresentamos nosso estilo artístico. O design e a produção de videogames são, como um todo, um esforço extremamente colaborativo. Mesmo pequenos jogos indie exigem um conjunto de habilidades variadas para criar uma visão unificada para um jogo. Manter essa coesão através de um processo de design longo e complicado é uma das coisas mais difíceis de se retirar como um grupo de desenvolvedores. Não é sem igual para uma banda que viaja por todo o país em um pequeno ônibus turístico, e tem um efeito semelhante ao querer abandonar seus companheiros em paradas de caminhão bastante desagradáveis. O Mischievous Monkey, nosso 8220Bad Guy8221. Entrando em nossa terceira semana de desenvolvimento no Pawcho, uma vez que o alto conceito e a mecânica foram pregados, era hora de falar sobre a narrativa. Poucos jogos educacionais escolhem para evitar a história, dependendo inteiramente de personagens reconhecíveis e de efeitos de áudio e visual superiores aos pontos de venda e entretenimento. Embora possamos ser grandes fãs de Pawcho como equipe, também entendemos que não temos reconhecimento de marca para vendas fáceis. Queríamos explorar uma opção que atraísse tanto a criança como a mãe. Queríamos que Pawcho fosse uma história e um livro para colorir em um, e em nenhum momento queríamos que a narrativa se sentia forçada ou desnecessária. Cada nível de Pawcho envolve uma criança interagindo com várias letras, rastreando e preenchendo para completar uma tarefa para o nosso bravo cão da polícia para ajudá-lo ao longo de sua jornada para resgatar o ABC. Durante cada um dos níveis, queríamos histórias curtas para expandir sua aventura, mas o problema era onde colocá-las. O que não queríamos fazer foi interromper a jogabilidade, especialmente para as crianças que não podiam ler as histórias. Em última análise, escolhemos ir com a separação narrativa e colocá-los no final dos níveis para evitar esse problema por surgir. Um Storyboard de um dos enigmas que Pawcho enfrentará. A idéia é dar parte do jogo para crianças, e parte para o adulto. Imaginamos o Pawcho como um jogo que poderia ser jogado como um esforço colaborativo entre pai e filho. Enquanto a criança pode desempenhar os níveis, preenchendo as letras e resolvendo os enigmas, depois o pai pode ler as histórias curtas desbloqueadas para que ambos possam experimentar mais as aventuras de Pawcho8217s. O estilo visual e as histórias interativas são ótimas, mas nada realmente bate apenas lendo uma pequena história tola para o seu filho, especialmente aquela em que eles são investidos. Volte na próxima terça-feira, onde vamos analisar a forma como os nossos níveis se quebram, os puzzles dos filhos Enfrentar o jogo e como usamos as letras como um dispositivo narrativo. Últimas Notícias Vídeos Inscreva-se Cadastre-se Faça login na sua conta Faça login na sua conta Conta Desativada Conta Reativação Falha na Conta Ativada Verificação de Email Obrigatório Quase Feito Confirme seus detalhes abaixo. O Postmedia quer melhorar sua experiência de leitura e compartilhar as melhores ofertas e promoções de nossos anunciantes com você. As informações abaixo serão usadas para otimizar o conteúdo e tornar os anúncios na rede mais relevantes para você. Você sempre pode alterar as informações que você compartilha conosco editando seu perfil. Atendimento Print Newspaper Subscripters Para verificar as ofertas do Print Subscriber (por exemplo, epaper, Digital Access, Subscriber Rewards), insira seu número de telefone de inscrição no Print Newspaper e seu código postal. 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Verfiy seu email Crie uma nova senha Crie uma nova senha Junte suas contas Faça login para completar a fusão de conta Reenviar Verificação Email Verificação E-mail Enviado Email Verificado Alterar Senha Senha Alterada Criar Nova Senha Criar Nova SenhaS Corporação Salários e Distribuições : Planejamento Tributário Básico A maioria das pequenas empresas americanas usa a forma de empresa S de fazer negócios. Este artigo discute uma das principais técnicas de planejamento tributário que uma corporação S pode usar para economizar impostos. A Corporação S e Pagamentos a ParticipantesEmployados Uma corporação S é uma entidade passiva e não paga imposto federal sobre o rendimento. O lucro líquido da empresa S é transferido para os acionistas da empresa e informou sobre suas declarações de imposto de renda individuais. Normalmente, um proprietário de ações em uma corporação S também executa serviços para a empresa que o faz, além de um investidor na empresa, um funcionário da empresa. Então, qual é o tratamento tributário adequado dos dinheiros que são pagos a partir dos lucros das empresas para o empregado da empresa S. Deixar de lado os pagamentos da corporação S para o investidor empregado que são empréstimos, reembolso de empréstimos ou retornos de capital anteriormente investidos por ele, existem duas categorias Dos pagamentos ao investidor empregado: salários e distribuições de acionistas. Veja como cada categoria é tratada para fins fiscais: Tratamento tributário de salários 8211 Os salários pagos a um investidor desempregado de uma corporação S são tratados como salários pagos a qualquer outro funcionário. A retenção na fonte federal e os impostos FICA são retidos nos cheques de pagamento do investoremployee8217s de acordo e o investoremployee recebe um cheque líquido no final de cada período de pagamento. A corporação s deve 8220match8221 e pagar ao IRS um valor igual à parte FICA da retenção de impostos. De acordo com a lei atual, o empregado é obrigado a pagar (e reteve) 7.65 de seus salários em relação à Previdência Social (6.2) e Medicare (1.45). Isso significa que a corporação S também deve pagar ao IRS, com recursos próprios, 7,65 dos salários dos funcionários. (Nota: Em 2009, a parte da Segurança Social do imposto FICA aplica-se apenas aos salários até 106.800). A remessa combinada da FICA, então, é de 15,3 (2 x 7,65). A corporação S tem direito a deduzir o montante dos salários brutos que paga aos seus empregados, incluindo os seus investidores, na determinação do montante do lucro líquido que será transferido e tributado sobre os retornos dos accionistas 8217 da S corporation8217s. A corporação S envia um formulário W-2 para o investidor e o investidor deve incluir os salários em sua declaração de imposto de renda federal. Tratamento tributário das distribuições de acionistas 8211 As distribuições de acionistas são tratadas de forma diferente dos salários porque são consideradas como um retorno sobre o investimento do investidor em empregado na empresa S e não na remuneração dos serviços prestados. As distribuições para um acionista devem ser incluídas no lucro tributável dos acionistas no entanto, as distribuições não estão sujeitas ao imposto FICA e não são consideradas receitas de trabalho independente sujeitas a imposto de trabalho independente. Nenhum W-2 ou 1099 precisam ser emitidos pela corporação S para o acionista e a corporação S não possui nenhum requisito de correspondência FICA, pois nenhum imposto FICA é devido. Aqui estão dois exemplos que ilustram as diferenças no tratamento tributário dos salários e das distribuições dos acionistas: Exemplo 1 8211 Todos os salários e Nenhuma Distribuição de Acionistas A Capone, Inc. é uma corporação S. Possui um sócio que também presta serviços para a empresa. Em 2009, a corporação S paga 80 mil salários para o acionista único e as distribuições de acionistas zero. Aqui está o cálculo da FICA para o salário pago ao acionista: Retenção do acionista (investoremployee): 6.120 (7.65 x 80.000) Correspondência do empregador (pago a partir de fundos S Corp): 6.120 Total do imposto FICA pago: 12.240 A corporação S emitirá um W -2 para o seu acionista no valor de 80.000 e o acionista deve denunciá-lo como renda do salário em sua declaração de imposto pessoal. Exemplo 2- 50 Salários e 50 Distribuições de Acionistas Os mesmos fatos que o Exemplo 1, exceto que a Capone, Inc. paga 40.000 de salários para seu único acionista e 40.000 de distribuições de acionistas. Retirado do acionista (investoremployee): 3.060 (7.65 x 40.000) Correspondência empregadora (pago a partir de fundos S Corp): 3.060 Total do FICA pago: 6.120 O acionista obtém um W-2 por 40.000 e informa que como salário em seu retorno. As 40.000 distribuições de acionistas são reportadas no Anexo E (PDF) do retorno e não estão sujeitas a imposto de trabalho independente. Ao transferir 40.000 dos salários para as distribuições de acionistas, há uma economia de impostos de 6.120. Os exemplos acima mostram que, por cada dólar (até o limite de salário da Segurança Social de 106.800) que é transferido de salários para distribuições de acionistas, haverá uma economia de 15.3. Um investidor empregado usa dois chapéus: primeiro, ele é um investidor que tem o direito de esperar um retorno sobre seu investimento. Em segundo lugar, ele é um funcionário que presta serviços de compensação. Consequentemente, faz sentido que haja uma repartição entre o que o acionista é pago pelos seus serviços e quanto ele recebe como retorno sobre seu investimento. No entanto, há muito abuso nesta área de planejamento tributário e os contribuintes devem consultar seus consultores fiscais antes de determinar como distribuir os pagamentos entre salários e distribuição de acionistas. Na última década, o IRS prometeu selecionar os retornos da empresa S para auditoria com base nesta questão, mas ainda não vi ou ouvi falar de um caso em que o IRS selecionou um retorno da empresa S para auditoria com base somente nesta questão. Compartilhe isto Related Posts Peter é um advogado fiscal e credenciado público certificado com mais de 20 anos de experiência ajudando os contribuintes a resolver seus IRS e problemas fiscais estaduais. Ele representou milhares de contribuintes que enfrentaram dificuldades em lidar com o Serviço de Receita Federal ou com os funcionários fiscais estaduais. Ele é membro da American Association of Attorney Certified Public Accountants. A Associação de Advogados da Flórida e o Instituto de Contadores Públicos Certificados da Flórida e é admitido a praticar antes do Tribunal de Impostos dos Estados Unidos, o Supremo Tribunal dos Estados Unidos, Tribunais Distritais dos EUA - Distrito Médio da Flórida O 4ok é tributado ao acionista, seja ou não Distribuído. No entanto, se ele estivesse pagando 80k em salários e ele reduz seu salário para 40k, a suposição é que ele pretende realmente distribuir os outros 40k. Ouvi dizer que a nova administração pode estar eliminando as economias da FICA que os funcionários da S-Corp agora percebem. Em outras palavras, os oficiais pagarão a FICA em todos os seus ganhos, salários e pagamentos feitos para investidores, assim como uma LLC. Qualquer atualização sobre isso E, o que um S-Corp pode considerar fazer isso ocorre. Obrigado Amber Obrigado por visitar. Ouvi alguns sugerem que todos os pagamentos S corp feitos aos proprietários devem estar sujeitos ao imposto FICA, mas até agora nada foi proposto. Não faz parte das atuais propostas fiscais de Obama. Pergunta: eu tenho 49 de uma S. Corporation e o outro parceiro é 51 e deixei minha prática no final de maio. Desde então, não recebi nenhum sorteio, mas meu parceiro profissional continuou a tirar sorteios. No final, fui tributado nos 130k sorteios que não recebi. É que o dinheiro é devido a mim. Se eu entendendo tudo o que I8217m lê aqui, o S Corp paga ao meu marido (o único oficial) um salário estabelecido, e qualquer coisa acima, depois que as despesas são adicionadas nas nossas declarações de impostos pessoais 1040 na linha 17 com a agenda E anexada . O amt relatado no cronograma E, deve incluir o que resta na nossa conta da empresa e, em seguida, outra linha para as distribuições. Mas, se nós don8217t tomar uma distribuição, isso não será calculado nos próximos anos company8217s retorna correto Outro rápido par de Perguntas, em termos de distribuições, para a S Corp, existe um limite de amt que começa a exigir que façamos impostos estimados ao longo do ano fiscal e também é melhor ou um benefício para fazer uma distribuição única ou distribuições mensais. Além disso, quando as pessoas Falar sobre distribuições ou dividendos, são aqueles que são usados ​​de forma intercambiável ou são tratados de forma diferente. Não há limites, mas existem portos seguros. Veja o meu blogposto intitulado IRS Underpayment Penalty Safe Harbor Rules. O momento das distribuições que você toma tem mais a ver com sua necessidade do dinheiro do que quaisquer considerações fiscais. A menos que você se converta em uma Corporação S de uma Corporação C, você não precisa se preocupar com dividendos. Os dividendos são o pagamento de distribuições de uma empresa C ou dos ganhos e lucros de uma antiga Corporação C. Quando você paga dinheiro com os lucros de uma Corporação S, simplesmente é chamado de distribuição. Então, apenas para esclarecer, na 1ª resposta, independentemente de haver uma distribuição ou não, deve ser incluída toda a conta da empresa (menos deduções permitidas de salário). Além disso, depois de ler os portos seguros, o último ano desde que foi iniciado em 08, ele não devia nada, não temos certeza se teremos esse ano com deduções, mas se o fizer, então este ano que vem se pagarmos os impostos estimados Então, nós não seríamos penalizados, isso é correto. Para expandir ainda mais isso, o S Corp obtém um salário base, mas pode ou não receber um bônus, como isso é corrigido em termos de impostos estimados se não tivermos certeza do amt, Se algum de todos os agradecimentos. We8217re an S Corp, é o sorteio que tiramos sujeito ao imposto de renda pessoal ou é pago através da corporação. Meu contador está me dizendo que eu pago meus impostos através da corporação e o que nós tiramos não está sujeito ao imposto sobre o rendimento pessoal. Obter um novo contador. Os acionistas são tributados em sua participação (com base na porcentagem de participação) dos lucros líquidos da S Corporation, seja ou não realmente distribuído. Preciso de uma assistência não só com os meus impostos, mas também com a minha folha de pagamento para a minha S Corp. Eu tinha um amigo que lidava meu corpo e, nos últimos dois anos, ele declarou que não precisava pagar meus funcionários (que é meu marido e I) salários. Que eu só posso fazer um Sch. K-1 no final do ano, com o restante do lucro deixado após todas as deduções, que é muito baixa até agora. Estou agora descobrindo que isso é incorreto e, para 2008, meus impostos foram arquivados com apenas um K-1 e não os W2s foram fornecidos ou colocados na linha 7 do formulário 1120S. Este será o meu segundo ano de fazer os meus impostos para o meu S corp e ainda não paguei qualquer FICA para o ano de 2009 para o meu marido e eu (funcionários e funcionários da S Corp.). Preciso levar minha empresa no caminho certo e precisar de alguém para me ajudar a configurar o que preciso fazer para que eu possa pagar os impostos dos empregados (se não for atrasado para 2009) e se for tarde demais para, pelo menos, ir para 2010 . Eu não sei o que fazer neste momento e em uma perda. Espero que você possa me ajudar com tudo isso. Não podemos simplesmente emitir um W2 sem quaisquer deduções de STASESS. Obrigado e ansioso para ouvir de você. Então, eu estava ansioso para obter uma resposta para a minha pergunta e estava pensando se você tinha algum comentário sobre minhas perguntas. Os lucros não distribuídos da sua Corporação S devem ser incluídos no seu 1040. Você não calcula lucros pelo what8217s em sua conta bancária no final do ano. Sugiro que você contrata um bom CPA ou contabilista para manter seus livros para você. No que diz respeito aos portos seguros de pagamento estimados, o pagamento do porto seguro não é o montante que você devia no final do ano anterior, mas sim o seu passivo tributário total para o ano anterior. Os bônus são tributáveis ​​como salários. As distribuições não são salários nem renda por conta própria. Mais uma vez, sugiro que você contrata um CPA para ajudá-lo com seu planejamento tributário e a manutenção de seus livros. É ótimo que você tenha esse site. Minha pergunta é: minha esposa possui uma S-Corp (apenas começou outubro de 2009) e pagou-se um salário total de 5000 para esses 3 meses. Será que 5000 são relatados como outros rendimentos8221 em nosso 1040 desde que ela não gerou um W2 Meu chefe em nossa S-corporation de 25 pessoas rejeitou o pagamento das distribuições de S nos últimos 3 anos, dizendo que 8220eventualmente8221 pagaria, mas agora Está olhando para usar o dinheiro (atualmente sentado em um CD) para aumentar a avaliação da empresa em antecipação à criação de um ESOP para que ele possa vendê-lo e se aposentar de executá-lo. Isto é depois de ter pago uma distribuição S nos 22 anos anteriores. Devo mencionar que ele escreve uma parte da distribuição como um cheque para que possamos cobrir (praticamente) a obrigação fiscal. I8217m não está feliz e I8217m perguntando 8211 há um potencial para um processo (bem sucedido) aqui para obter o dinheiro que I8217ve pagou impostos. Como ele possui 80 do estoque, não temos nenhuma opinião sobre o que acontece. Bob, eu precisaria de mais informações antes de lhe dar aconselhamento sobre esta questão. Por exemplo, você tem um Acordo de Acionistas Quem são os membros do Conselho de Administração Quem é o Presidente da empresa Etc. Meu parceiro de negócios e eu possuo uma empresa em CO que é um S corp. Cada um de nós tem 50. Decidi deixar uma nova oportunidade. No entanto, gostaria ainda de possuir a empresa. O meu parceiro de negócios concorda. Uma vez que ele continuará a dirigir a empresa, queremos tirar-me da taxa de pagamento e dar-lhe 100 da folha de pagamento de dinheiro. Em outras palavras, em vez de tomar metade da renda, ele tomará tudo. Isso é possível sob um Scorp Obrigado pela pergunta. Não há exigência de que os funcionários da empresa, incluindo os empregados, recebam salários iguais. O único requisito é que as distribuições dos lucros (após o pagamento dos salários) sejam proporcionais ao percentual de porcentagem de participação do accionista na corporação. Don8217t deixá-lo tirar todo o dinheiro como salário. Mesmo que você não esteja ativamente envolvido no negócio, você deve obter um retorno sobre seu investimento 8211 para o qual são as distribuições. Se um acionista da S Corp receber distribuições em excesso de sua base e deve denunciar isso em sua declaração de imposto pessoal (cronograma D) como um ganho de capital, essa informação será passada para o acionista de alguma forma. Qualquer uma dessas informações aparecerá em algum lugar O K1 ou o imposto de renda corporativa. Ou o acionista simplesmente deveria descobrir o seu próprio ganho de capital e denunciá-lo I8217m 5050 com meu irmão em um corpo S. Meu irmão faz a maior parte do trabalho e ganha 40k, pagou o FICA. Eu faço 10k, o FICA pagou. Em cima disso, cada um nos paga 10k em distribuições. Nós deixamos uma grande quantidade de lucro na empresa. Passamos pelo lucro a cada ano nos nossos 1040 como deveríamos. A minha pergunta é como pagaremos esse lucro que acumulou ao longo dos anos Existem impostos que ainda se aplicam a ele Ryan, assumindo que o negócio foi uma corporação S desde o início, você não deve ser tributado sobre a distribuição real dos lucros porque, presumivelmente , Você já pagou impostos sobre eles. Se o negócio fosse uma vez uma corporação C que mais tarde foi convertida em uma corporação S, a resposta é mais complexa e eu precisaria de mais informações. Peter, obrigado pela sua resposta. Nós fomos um corpusão S desde o início. Compreendi que os impostos sobre o rendimento já tinham pago. Então, nós podemos tecer-nos tecnicamente cheques iguais por lucros passados ​​e don8217t preciso denunciá-los de qualquer maneira Peter, eu tenho uma pergunta, quando é o mais recente que a acompanhante pode assumir a distribuição. Podemos levar a distribuição para o ano de 2009, agora ou também? Tarde Me avise, madame. I8217ve configurar uma S-Corp na Flórida em novembro, sem receita até o momento. Como você sabe, a Flórida não tem imposto estadual sobre o rendimento. A minha pergunta é que eu não tenho renda na linha 22c do meu 1120S. Eu ainda preciso arquivar imposto de renda do estado para o s-corp Obrigado Existem vários tipos de pagamentos que uma corporação S pode fazer aos seus acionistas, incluindo, mas não limitado Para: Salários (se o acionista for também um empregado) Distribuições Devoluções de capital Empréstimos ao acionista O reembolso de empréstimos das Distribuições de Juros de Acionista são pagamentos feitos a um acionista dos lucros acumulados e correntes da corporação S. Eles podem ser feitos em qualquer momento, desde que sejam feitos em proporção aos acionistas percentuais percentuais de participação na corporação. A menos que você esteja tomando distribuições em excesso, o ano em que você recebe uma distribuição (ao contrário de um dos outros tipos de pagamentos de acionistas) é imaterial. Eu estava no mesmo barco. Talvez essa informação o ajude: do site do Departamento de Receita da FL: 8220S As empresas e as organizações isentas de impostos geralmente não precisam apresentar uma declaração de imposto sobre o rendimento das empresas da Flórida se não tiverem rendimentos tributáveis ​​federais.8221 Do artigo sobre este Página: 8220 Uma corporação S é uma entidade passiva e não paga imposto federal sobre o rendimento. Os ganhos líquidos da corporação S são transferidos para os acionistas da empresa e relatados em suas declarações de imposto de renda individuais.8221 Tenho 100 donos de uma empresa com sede em NY. Eu sou um senhorio de um prédio de apartamentos. A empresa sempre foi um corpão desde o dia 1. Minha pergunta é, desde 2004, o meu corpo obteve um pequeno lucro, mas nunca me preocupei em me distribuir. Quero saber se posso voltar de 2004 a 2009 e reivindicar os lucros obtidos pela minha empresa e me entregar uma boa distribuição de acionistas ou renunciei aos meus direitos de cobrar as distribuições ao permitir muito tempo para passar. Por menos manutenção Entre outras coisas, o lucro líquido projetado para o meu corpo está procurando ser em torno de 200K. Nunca foi tão alto. Sempre foi em torno da marca de 30K. A minha pergunta é que, uma vez que eu apenas pago 60K por ano em salários salariais (o FICA pago) e os impostos de meu s corp8217s são 8220 flow-through8221 para meus impostos pessoais, I8217m enfrentando uma enorme taxa de imposto para o potencial lucro líquido de 200K para 2010 que eu posso Não pode pagar em um nível pessoal, já que eu só recebo 60K de salário. Então eu preciso saber se existe algum tipo de estratégia que você recomenda que eu possa usar para encontrar o dinheiro para pagar os impostos sobre os 200K ou uma estratégia para reduzir o lucro líquido de meus corp8217s para o fluxo de impostos que não seria tão alto Por exemplo: se o corp da S me empresta dinheiro, é considerado uma despesa para a empresa que, em última análise, diminui o lucro líquido da empresa, venha o tempo do imposto, portanto, menos impostos a serem pagos no fluxo. Eu fui um acionista de um S - Corporação por 2 anos. Nos últimos 2 anos do k-1, paguei impostos sobre distribuições que nunca recebi. Além disso, fiz um empréstimo de 25000 para o presidente da corporação e ele prometeu me pagar de volta. Quando a corporação foi encerrada e reformada após o reembolso, ele me pagou 26000 pelo que eu coloquei (então, na verdade, eu apenas fiz 1000 no investimento inicial), mas tenho medo de que ele tente colocar mais renda no meu k-1 Este ano, então ele não precisa pagar o imposto sobre os ganhos que recebeu do refinanciamento do empréstimo. Além disso, como faço para garantir que não receba impostos sobre os 25 mil que ele adicionou à minha venda de ações. Uma nota promissária seria suficiente. O cheque inicial de 25.000 foi feito para ele e não para a corporação. Por favor, ajude Existe algum recurso legal que tenho sobre o que é o que é o modelo K-1 e como ele foi construído para que não me penalize. Eu acho que você entendeu mal minha pergunta em 51. Depois que o corp de S paga meu salário anual de 60K, para 2010 estou projetando O corp to net cerca de 200K em s lucro corp. O corp de s nunca compensou essa enorme quantidade antes. O corp de s normalmente compensou no passado cerca de 30K após todas as despesas e meu salário é pago. Eu nunca tomei a distribuição de acionistas no passado e sempre deixei o lucro no negócio como dinheiro em casos em que algum trabalho de reparo enorme e caro me surpreende como substituir a caldeira, o telhado, etc. Eu queria ter certeza de ter dinheiro suficiente Para financiar os reparos se fosse ocorrer. O problema potencial que eu enfrentarei em 2010 é que não posso pagar com os meus próprios bolsos os impostos sobre o capital de fluxo direto sobre o lucro líquido de 200K no meu salário anual de 60K, a menos que eu receba um aumento salarial que não faz imposto sensato sensato. Então eu preciso saber se existe algum tipo de estratégia que você recomenda que eu possa usar para encontrar o dinheiro para pagar os impostos sobre os 200K ou uma estratégia para reduzir o lucro líquido de meu corpo s, de modo que os impostos sobre o fluxo não seriam tão altos É uma boa idéia retirar uma distribuição de acionistas do lucro líquido que a empresa realizou para cobrir o valor dos impostos que terei que pagar com os impostos de fluxo. Eu tenho uma questão relacionada com a minha pergunta anterior. O S-corporation que eu tinha 10 proprietários foi refinanciado e 600,000 foram distribuídos. No entanto, queria sair, então recebi meu investimento inicial de 100.000, mas nunca recebi nenhuma distribuição de 600.000 (que teria sido de 60.000). No K-1, minha participação assumida na distribuição (10 propriedades) 60000 apareceria e eu seria obrigado a pagar impostos sobre isso mesmo que o presidente da empresa dissolvida não me desse um centavo. Uma nova empresa foi formada Depois do refinanciamento e não sou parte dessa nova empresa. Por favor, ajude-me a sentir que eu posso dormir até eu conseguir esse k-1. Existe alguma maneira de que as distribuições que ele manteve consigo mesmo sejam tributadas em seu retorno e não minhas E o que aconteceria se eu não informasse isso em meu retorno O IRS viria depois dele porque ele manteve meu dinheiro de distribuição Obrigado por esta postagem de blog e As respostas que você deu nos comentários, mesmo depois de quase um ano de publicá-lo. Aprendi muito com as suas respostas. Eu tenho uma situação em que eu e dois parceiros registraram como S-Corp. Porque eu sou o último parceiro a juntar-se ao trio e I8217m cerca de um ano atrás deles no design de desenvolvimento de produtos, fui trazido com 20 partes da empresa e meus parceiros com 40 partes. Nós contribuímos cada um com as porcentagens apropriadas para uma conta corporativa para nossas ações. Uma vez que estamos arrumando isso por conta própria, estamos dividindo as despesas de forma uniforme (principalmente legal agora). Gostaria de saber como devemos acompanhar o que nós essencialmente emprestamos à empresa. Uma vez que eventualmente planejamos ser reembolsados ​​pela empresa por todos esses (à medida que começamos a receber clientes) devemos tratar o reembolso desses empréstimos como parte das perdas no balanço da empresa Oi, este blog parece ser muito útil . Uma pergunta direta, mas sobre a qual eu posso parecer a resposta (sem consultar um conselheiro fiscal pago, suponho): eu tenho 100 donos de um S-4. Eu pago 100 dos lucros a cada ano via 1099. Eu uso Turbotax Negócios e Premier para o S48217 e os meus impostos pessoais. O S-4 recebe sua receita por meio de 1099 rendimentos. Onde os impostos FICASS são calculados e pagos, e qual mecanismo é usado para fazer o pagamento das distribuições de S-corp para o indivíduo não são relatados em qualquer tipo de formulário de declaração de renda, como um 1099-DIV. Um Anexo K-1 é o formulário de relatório para fins do IRS para o compartilhamento representado pelo indivíduo8217s do S-corp. Pergunta: as 8220distributions8221 são reportáveis ​​como renda além do que o 8282 relatou da Lista K-1 O S corp para o qual trabalhei me fez cortar cheques aos acionistas para distribuições e um dos proprietários mencionados em seu e-mail que ele fez as distribuições para Pague alguns saldos AR. Eu só tenho um histórico contábil limitado, mas parece um pouco desconfiado para limpar os saldos AR, fazendo distribuições. É legal Eu sou um parceiro 50 em uma S-Corp e tenho um parceiro que ganhou8217t mostrar-me os livros, afirma que a empresa não faz lucros e ele tira 30 impostos da minha comissão ganha de transações imobiliárias que eu acredito é eu Pagando minha parcela e a parte da FICA da empresa. Eu nunca recebi distribuições ou uma gaveta8230 Ele é muito narsastic, Ajuda Isto é o que eu estou procurando saber8230 Eu estou em deficiência. Estou começando uma S Corp como um investimento e não tenho mais ninguém que eu possa colocar como um oficial, etc. Eu tenho alguém que basicamente fará todo o trabalho fazendo todo o dinheiro como contratado independente. Estaremos dividindo o lucro. Como eu basicamente não farei nenhum trabalho, não quero ganhar salário por razões de segurança social. Eu só tomarei todas as distribuições necessárias que eu preciso para pagar contas. O resto será reinvestido na empresa. Acho que a minha pergunta é essa. Posso não receber salário (ou talvez 500 mo.) E ter tudo como uma distribuição, e, em caso afirmativo, quando eu arquivar, tudo será passivo e não tributado como tal (NÃO como Renda salarial) é certo se não, o que você sugere, NÃO PODE Me dar ao luxo de perder minha segurança social. Além disso, não seria possível contratar uma empresa de folha de pagamento se eu acabar tendo algum empregado, eu tenho um amigo com uma LLC que paga todos os seus funcionários através da empresa de folha de pagamento, evitando assim a necessidade de lidar pessoalmente com os trabalhadores de retenção de imposto de salários , Etc. problemas. Isso também faz muito sentido. Também vivo em FL onde os salários são notoriamente baixos. Se eu apenas 8220 trabalho8221 2 horas por dia fazendo 15 por hora (o que é muito alto aqui para uma posição clerical) que seria 30 dias x 5 dias máximo para 150 semanas x 4 semanas que é 600 por mês. Eles podem fazer você fazer 2000 por hora. Eu esperaria fazer o que qualquer outra pessoa em FL faria (deveria ter a sorte de ter um emprego) e, em seguida, o resto deveria ser uma distribuição, não seria correto8230. Como eles podem culpar isso, desde que você possa provar que outra pessoa está fazendo todo o outro trabalho que estou ansiosamente aguardando para ver quais serão suas respostas. (Eu devo verificar isso 4 vezes por dia, lol.) Uma outra coisa is8230 Se você está APENAS COMEÇANDO e nunca possuíu um corp antes, além de pagar o que seria considerado como um salário para uma área, COMO seria a empresa mesmo CONHEÇA o que pagar como 8220wages8221 se você não tiver feito nenhum antes na empresa, acho que estou de volta a este8230. Se a empresa talvez colocasse artigos para pagar 8220 razoáveis8221 salários (oficiais 50 por hora para reuniões, 10 8211 15 por hora para clerical Trabalho, etc.) não consideraria praticamente o requisito 8220wage8221, mesmo que no final do ano, o 8220wages8221 pode ser bastante diferente do valor da distribuição 82221 porque você pode pagar salários enormes se você não sabe o que você vai fazer8230. Eu certamente can8217t Pegue 40k em 8220wages8221 em um ano e, em seguida, apenas lilyally faça 10k em profit8230 Corp falharia. Além disso, se você começar com 50 em dinheiro e comprar 50k em ativos tangíveis (carros) e obter lucro de 10k, reinvê-lo para que você tenha 60k em carros, ganhe 15k de lucro, reinvê-lo, etc. repetidamente8230. No final do ano, se o 8220profit8221 estiver empatado em ativos tangíveis, diga que você está sentado com 30 carros em 31 de dezembro, não tendo o 8220profit8221 no banco PARA DISTRIBUIR, você está tributado no ativo, mesmo que NÃO possa ser distribuído unidade São revendidos novamente. Tudo isso é tão novo para mim, que qualquer informação seria muito apreciada. OBRIGADO POR FAVOR, TANTO 1. O IRS analisa os salários dos funcionários em indústrias similares para determinar um salário razoável. Existem vários sites que fornecem essa informação. 2. O problema que você levanta para determinar se a empresa está ganhando dinheiro suficiente para pagar os salários não é um problema. At the end of the tax year you will know whether or not the company made a profit and at that time you can pay yourself a wage bonus and deduct the appropriate payroll taxes from it. 3. S Corporation shareholders are taxed on their distributive share of corporate profits regardless of whether or not those profits are actually distributed. In other words, in your example, it doesn8217t matter that the corporation retained the profits or distributed them. Corporations that wish to retain profits often choose the C corporation form for this reason. This is also one of the reasons S corporation shareholders enter into an agreement requiring the corporation to distribute at least enough profits to cover the shareholders8217 increased tax liability. These are complex questions and you should not rely on my advice to determine what course of action to take. I recommend that you hire an experienced CPA or tax attorney to advise you. My husband and I were 5050 but just recently we amended the shares to 5149 so that I could be treated as a minority business. This change was only made on sunbiz. org. It was verbally agreed upon by my husband and I. Now the situation has changed and we are getting a divorce. My question is, is my 51 legal enough to get him removed from the shop because he is taking cash out of the draw and the bank for personal use when the shop can8217t handle it. We have only been in business for a 1yr and it is just now getting on its feet. I can8217t manage the shop if he is taking funds that should be paying the bills. For example, he took the 4k that was needed to pay the Federal payroll taxes for this past quarter. What can I do. This is driving me crazy. I need more information to advise you on a course of action. I recommend you consult with a lawyer, preferably a divorce lawyer who has a solid business background. The issues are complicated. If he has signature authority on the bank accounts he has the right to withdraw the money, so you might want to start by talking to the bank. But, please, get a lawyer. You don8217t want to rely on the advice of a tax blogger whom you have not retained and whom does not have all the information needed to render proper advice. I own 25 of an S-Corp and my partner owns 75. If I receive a draw for example of 5ooo does my partner HAVE to take out 15,000, 3 times that for his draw Or can it be less I was under the impression that you are allowed whatever your stock basis was the year before and it could be any amount under that per owner. Thanks Peter Where I work, we are an S Corp. There is only one shareholder, and many times if we are low on funds he gives money to the company. It is listed as a Loan from Shareholder. When I pay him back or reimburse him, does he have to report that as income The reason I was asking is because I thought rather than paying him his salary we could pay him back until we have paid him everything he has 8220lent8221 the company. The amount he has lent the company is sizeable, but I didn8217t know if he should be paying taxes on the reimbursed amount. Repayments of a loan are not taxable income. Just be sure you document the repayments properly and you probably should have a Note drawn up with a reasonable interest rate just to establish that the loan is bona fide. I own 4.5 of an S-corp and the founder 90. He takes what he wants throughout the year and I8217m unclear on his official 8220salary8221, thus unclear on how much profit there is at the end of the year as he will max out to reduce taxed profit or distributions. He typically zeros out the books at year end and I try to get financial statements, but am unsuccessful. How do you tell your boss that he has to have an official, fixed salary How do you determine how much over his salary is profit and should be distributed. He set this up as a retirement vehicle for himself and I would like reassurance (by way of compensation and profit sharing) that I am benefiting from his retirement plan and ownership program. Any words of advice or resources would be greatly appreciated. Muito Obrigado. Thanks for the question. You don8217t say what state you are from, but in Florida any 5 shareholder has a right to see the books. You might want to start by looking at your state8217s corporate law. If he is paying himself just enough salary to zero out the profit, you have a legitimate concern because he is, thereby, making your 4.5 profits interest worthless. You need to confront him on this. If the numbers are big enough, I suggest you consult with a corporate lawyer in your state. I received a question from a friend last night and wanted to give him the best advice for his situation. He has an S-Corp with another person. There ownership is 5050. They are currently on an accrual basis of accounting for tax purposes. Each owner gets paid an equal Salary and the remaining money is left in the business. The S-Corp pays there tax liability on each owners personal tax return as well. The issue here is, the tax liability is lower for one of the owners, because they have more personal write-offs and filing status is MFJ v. Single. What is the best advice so that I can give to my friend, so that the distribution is even and fair among the partners. Peter, I am a 50 owner of an S corp and my business partner was also employed by another entity when we started. After one payroll cycle, he was laid off and started claiming unemployment benefit. Since that time he has not received any salary from the S-corp. I have taken regular salary payments since. I now wish to take a distribution but as I understand it, any distribution would have to be made to us both on a 5050 basis 8211 as he is unemployed, he is unable to receive any payments at all so does that mean I can not take a distribution either Thank you I am the sole ownershareholder of a newly formed S-corp. I elected to be an S-corp primarily for the tax free distribution. How does my basis in the company affect the amount of distribution I read that I cannot take a distribution greater than my basis in the company. So if I invest 10,000 in capital, does that mean I cannot take an annual distribution greater than 10,000 And I read your distribution reduces your basis in the corp. So after I pay myself a 10,000 distribution one time, does that mean my basis in the company is now zero. Thank you for clearing up this matter for me because I am completely dumbfounded by this basis thing You can take distributions in excess of basis, but they are taxable. Basis determinations can be complicated and I suggest that you hire an experienced CPA or tax attorney to prepare your return and give you ongoing tax advice. Hi peter, If there are two shareholders one has 70 and the other has 30. If 70 shareholder earns 15000 to himself but not to other shareholder what should i do to resolve this problem since this is uneven distribution8221 It is only distributions which must be equal. If the 70 shareholder earned the 15k for services he rendered as an employee and it is paid out as wages, the S corp has not violated the rules. If the 15k is a distribution, however, the S corporation would have to make a proportional distribution of 6k to the 30 shareholder. Hi Peter - I am a 100 shareholder in an S corp that I plan on liquidating. I owe 200,000 to the company that I cannot afford to pay back. How do I account for this. Does the corp report cancellation of debt Or is it a distribution to me If an S-Corp pays an outside payroll service for wages and the outside payroll service W-28217s the S-corps employees under the payroll services8217 name and id, would you still list those wages on the S-corp8217s tax return as wages of payroll services If you are leasing the employees from the payroll service, they are not your employees and you would not list them as your wages. Peter, I lost tack of how much time I have spent on reading these questions and answers. Bem feito. I have an S corp I started 12-2-09, and have been making estimated tax payments quarterly. My business is seasonal. I make twice as much the second half of the year. The estimated tax payments instructions dictate EQUAL quarterly payments. What if you don8217t make EQUAL quarterly income Hello, My husband made me President and 75 owner of his company because he said he would get a better worker8217s comp tax rate or something like that. My question is, should I have been getting paid for that I can8217t recall ever being paid and I think I have been President for at least 2 years. I actually don8217t do anything, I don8217t attend meetings or make any kind of decisions whatsoever. Also, can bankrupty of the company effect my personal savings or retirement. Thank you for your help I am 13 owner of an S-Corp. One owner is more of an advisor with no day to day duties. He is not involved in day to day marketing, sales, etc. Myself, and another partner are in the office and market our company and run daily operation. We do not have weeklybiweekly w2 earnings. We habe one employee who is paid biweekly payroll. We instead take a payroll about once a quarter. We split the expenses 13 each, then split revenue as W2 earnings. The 13 goes to our partner who is not located in our office. (not sure if it is payrolled) for he is also 100 owner of another like company. We are going on three yrs and have yet to take a distribution or K2. (at least 2 partner can claim this)Are we foolish for not taking the tax advantage here We utilize the 8220other8221 partners accountant for the books. Your feedback is appreciated. Thanks Hello Peter, Thanks for posting this blog 8211 it is quite helpful. My question is regarding payroll amp taxes I am setting up an s-corp where I am the sole employee for now. I plan on paying myself a salary8230do I need to do monthly withholding for social security, medicare, etc from my own check Or is that paid at the end of the year when I file my personal taxes Does the s-corp need to pay monthly to the irs thier portion of the withholding, or again, is this done when filing taxes It8217s good that you8217re paying yourself a salary. I recommed that you make your deposits on a monthly basis and not wait until the end of the year. Your payroll deposit will include the employer8217s share of FICA and medicare. It might be a good idea to hire a payroll service to handle this for you. My partner and I have been 5050 owners in an S Corp for several years. In August, I paid him for his shares, and he legally left the company. If I do a distribution to myself in December, do I need to distribute the same amount to her (because she had a 50 share earlier in the year), or not need to distribute anything to her (because she is no longer an owner It seems to me that S-Corp distributions are not counted as earnings for the calculation of pension contributions for defined contribution plans. To the extent that wages are reduced by contributions below the current pension compensation limit of 245,000 then pension contributions could also be reduced. This effect on compensation should be considered when the S-Corp is a group of professionals or other high wage earners. A pension plan can be written to have a high contribution percentage whereby the maximum of 49,000 is reached at an earlier wage ceiling but the entity may be forced make higher than desired contributions to other employees. Also, if wages have already exceeded the social security ceiling (unchanging at 106,800 for 3 years) then the only savings is th e 1.45 medicare tax. The distribution will not have any federal income tax withholding and whether the employee S-corp shareholder is required to pay estimated taxes or not they will still have to cover the income. For working professionals who are still locked-in to S-corporations distributions work best as 8220bonuses8221 and not as a way to allocate a large percentage of the profit. I have a debt question8230I started an S Corp with one of my friends in August, 2010 and we incurred alot of personal debt. When I decided to leave the S Corp we had verbally agreed to just pay on our own personal debt however, she has decided to sue me for 50 of her debt. I8217m a responsible for 50 of the debt We are 5050 shareholders, however, we did not make any profit from this business. At this point, I am still listed on the S Corp, not sure what I need to do from here Hi all, Just a quick Question. I have a S-Corp I started in 2010. Revenue was very small, I am the only Officer (100 shareholder). We only did 3 small jobs and most all the revenue was put directly back into building up our supplies, equipment, tools, etc etc. I took no wages, and only drew about 210.00 for myself through 2010. There is no logic in W-28217ing myself as the company balance is only 40.00 right now8230. Im not a vendor either so 1099 is not right either. If I claim my 210 disbursement only I dont see a problem with the being so low, but should I expect an IRS audit anyway (not much in the way of complicated financials here. so im not really too worried, but I want to know what my best option is) Thanks I have the same question as Ryan from 43 post. I could not find an answer to his question. I own 51 of a S corp and want to take out profits (that have been already been claimed and taxes have also been paid on my personal income tax returns) but the 8220real dollars8221 have never paid out. They have accumulated over the years and are profit I now want to take. How do I account for that in my financials Thanks8230love your website Hello there and thank you for all of your valuable answers. I own an S corp and pay myself a weekly salary to cover the work that I do. I just printed of my W-9 and ran my Shareholder Distribution Report for my accountant. I paid myself 13,290 in wages and 22,285 in Distributions. That is a vast difference (not intentional but my business is based on sales so the more we orders we have, the more I made so it was difficult to come up with a weekly salary). My question is 2 fold: First is that too big a discrepancy Secondly, at what rate are distributions taxed Any help you can give would be greatly appreciated. There is no formula to determine what the proportion of wages to total compensation must be. Because the numbers aren8217t that large I doubt you will have a problem, but you might want to take 50 wages and 50 distributions in 2011 just to be safe. Distributions are generally taxed at ordinary income rates. Distributions in excess of basis are taxed at capital gains rates. hilda dempsey says: Thanks for the great advise. I have the same question as 107. I bought the shares from my 50 partner of the S Corp. How do I report this on the 1120 S Do I issue my partner a 1099 B for the stock I am now 100 owner and want to do the taxes for the S Corp. The Corp did not have enough money to pay for the 50 shares, so I payed him out from my personal savings account. Do I report this as a loan to the S Corp. Thanks. Anyone, what percentage ( 8220S8221 corp) disribution for a doctor seems reasonable Thanks. If an S-corp makes profit, but does not make distributions, are FICA taxes still due I understand that INCOME tax should be paid by the shareholders, and you mentioned that several times, but I am not certain if FICA taxes should also be paid or not. My situation is that I own 100 of an S-Corp, which has made about 60k in profit last year, but never made any distributions. I am living off my savings, and I an even paying the income tax on S-Corp profits from my savings as well. Now I am worried if I owe FICA taxes, and if it8217s too late to do anything about it My question on distribution shows that I know nothing. I get it now, the distribution is recapturing your investment, right A new client has been doing business as an S corp and the former accountant for years took all salary deductions as a 8220bonus8221on line 19 misc expenses. The bonuses were about 50 of NI before bonuses. The individual reported the 8220bonus8221 on a schedule C item and paid the self employment taxes. How do I fix the various problems associated with this 8220short cut8221. IE no pr taxes wh, no pr tax reporting etc. part of my s corp sales is paid with paypal which I have used for personal as well as business expenses. Can the personal use be treated as a distribution I am a 100 shareholder and file a k-1 for the profits every year. If there are wages paid to the investoremployee, the business is profitable and has been for years, is it required to take a distribution, or does it just make sense to do so For what reason would you NOT take a distribution You are not required to take a distribution because you are taxed on it whether or not you take it. Usually, S corporations distribute at least enough to cover the shareholder8217s taxes on his share of S corporation profits. Peter, You are great I have learned a lot from the site. But I do have an important question and notice that some people that have asked them have not been answered. I did not make my quarterly payments because I don8217t make money all at once and it comes in spurts mostly at the end of the year. I need to know can I pay myself a wage bonus at the end of the year and do the fica taxes at that time since I did not pay quarterly and if so, will I be penalized Please let me know. Thank you Thanks for the kind words. If you made the money all in the last quarter of the year, you don8217t have to make the estimated payment on that money until January 15 of the following year. Peter, Thank you for your quick response. Can I just submit a w2 without any Fica taxes taken out Also, one more questions, do you think its worth keeping the S Corporation open with the following 48K minus deductions for business expense 39K. Leaving 9K left with 5K going out for wages and the rest in distribution. This is my 2nd year as a S Corp and the first year I only distributed 500 to each officer (distribution). I am just thinking it is not worth holding on to the S Corp. I sell Real Estate and related services and the market is very slow and I don8217t see it getting better anytime soon. What are your thoughts You have to withhold the FICA taxes. If you are going to continue your business, I would keep the S corporation. It8217s better to report your business operations there than on a Schedule C attached to your 1040. Peter, can you tell me how I can pay the 2010 wages now. I did not pay them in 2010. Is there a special form where I can use and figure out the late penalty fees Thanks again I used my distributions (in excess of my wages wFica) to pay my husband for his stock in our S Corp. The distributions and wages are all on our 1120S, but I am running into difficulty with Schedule D for his Capital Gains. First, how do I list his method of acquisition when he is the one who issued the stock to himself upon startup of the SCorp in 1996. (Is that still considered a 8220stock purchase8221) Second, on our joint return we are now being taxed on the Distributions as income AND on the Capital Gains he must claim for stock sale. Is there any way to avoid the 28 Capital Gain taxation We know that 8220gifting the stock8221 would have had no tax consequence, but wanted an arm8217s length transaction due to some toxic rental properties that he owns solely in his name and is going through Short Sale negotiations on. I have been running the S Corp for two years and we thought that it was time that the stock certificates were legally in my name rather than his. Our lawyer helped with the Corp minutes and Stock Ledger so that all is above-board witht the Stock Purchase on 122010. Your husband will have to recognize a capital gain on the difference between his basis in the stock (did he contribute moneys to the business at the time of start up) and the purchase price you are paying him. Nada mais importa. Thank you very much for such a prompt response. I had figured the same as what you have said, and will now just figure out the Schedule D instructions. We had figured the Capital Gains at 15 and are finding it to be 28 (ouch) instead. You provide a wonderful service to the S Corp community. God bless. Peter, I have the same issue as Joseph in post 164. Because the 5050 employee-shareholders didn8217t take salary the first year, the CPA reported 12 the profits as 8220contract labor8221 on the Schedule C and paid SE tax. 5050 Distributions were taken amp the other half of the profits were reported on Sch. E ordinary income 5050. Now I am the new CPA for the S-Corp8217s second year and they again have reported no salary. I feel as if my only solution is to do the same thing for this year with income on Sch. C and advise salary for next year. Please advise ASAP 8211 I have a meeting tomorrow with this client. Thx amp great site Peter, I have two areas of concern. 1. I did not think S Corp8217s had to pay quarterly taxes. Are the quarterly8217s only for companies that know they will have a large profit at the end-of-the-year and they want to even out the payment 2. I am the only ownershareholder of an S-Corp. It is a small business (15,000 yearly income) and generally passes through as a loss to my personal taxesdue to the deductions. I do not pay myself a salary because the money just is not there to justify it. However, at the end of the year, is it ok to pay myself back on loans I made to the company (900) Also, if there is any money left at the end of the year, is it ok to take as a shareholder distribution(900) i8217m 50 owner of an s corporation, my partner has taken more than 50K in distributions above and beyond his salary for 2010. Aren8217t distributions supposed to be equal And what if the company didn8217t make and profit in 2010, but the one partner took distributions anyway i am 25 owner of a s corp in another state. The day to day operations done by the majority owner. I am having a very hard time getting him to pay me so i can pay the tax on the income i have to report. I did not receive any income, but owe tax on the income. He of course takes a salary so has income to go with the tax he owes Is there any legal options open to me if he will not pay. small s-corp, I am taking 30,000 in W-2 wages rest is distributed thru K-1. 93.000 to my wife and 65,000 to myself. What is maximum we can contribute to SEP Is it based on W-2 salary or we can include K-1 as compensation as wellThanks Hi Peter, I am thinking about starting an S-Corp, but am having difficulty getting my head around the taxation issue. In your original example, you said that the shareholder saves 6,120 in Fica taxes. However, if the rest of the 40,000 is passed through to him as a shareholder (whether or not is is distributed), and if that 40,000 is subject to 8220ordinary8221 taxes (I8217m taking that to mean regular income taxes, am I wrong), then in that tax bracket he owes 25 on that 40,000, which equals 10,000, and is definitely not a savings. Where am I going wrong here Please explain. Obrigado. Thanks for visiting. The shareholder has to pay tax at ordinary rates regardless of whether her income is paid as compensation or a shareholder distribution. In other words, if the 40k in your example was paid as wages you would still have the 10k income tax debt but you would have also had to pay employment taxes at the corporate level on that amount. The distribution is better because it is not considered self-employment income and, therefore, escapes the 15.3 self-employment tax. Espero que isto ajude. Just a few observations, comments and one question. First you need to be applauded for your dedication to this blog. I have work to do but could not pull myself away from this blog until I had read every single post. (I8217m an anal engineer.) Reading between the lines it was chuck full of emotions from anger, fear, confusion, enthusiasm, excitement etc. I would offer this advise 8211 as you have repeatedly 8211 on the benefit hiring a competent CPA or bookkeeper. When I started my company I was fortunate enough to have sufficient income to afford a CPA, and, as painful as it was to spend that kind of money on him the first couple of years, your blog made me realize how important is was to get off on the right footing. To save costs I did my own accounting in Quickbooks and provided him an accountant8217s copy each quarter which he looked over and made any correctionsadjustment to my accounts and he prepared and filed any taxes owed. I learned a lot from him and assumed all responsibility after about a year. Granted, I place a lot of faith in Quickbooks and Turbotax each year but I no longer have any significant fear in doing my own taxes and accounting. That leads me to my question (finally). For a new start-up company where funds are extremely limited, would it not be better to start out as a sole proprietorship (other than liability issues) until the company gains enough traction to afford the initial learning curve for a corp. Keep-up the good work davend prasad says: After reading the entire blog, I am still struggling with my issue. I opened a s corp in 2009 and I had a loss in the first year which was transferred to my personal tax return. In 2010 I finally had some profit, but I didn8217t take any salaries because I didn8217t know what is going to happen in the end of the year. What would I do in order to do the right thing. Peter, I am buying a small S corp, but the current owner does not want to simply sell me his shares, which would allow me to continue with the same corporation name and Tax ID number. Instead, he wants a total break in ownership at the time of the sale. Therefore, I am establishing a new S corp. In this case, what should our contract specify that I am buying Will I be personally buying his shares and somehow transferring them to the new S corp If so, how do I legally transfer them Or will the contract specify that I am buying all assets of the current owner8217s S corp, without reference to the shares I very much appreciate whatever information you can provide regarding this issue, including anything about which you think I have failed to ask. (I just discovered your blog through Google. Your answers are well written and obviously helpful to many people.) You must report your share of S Corporation profits on your 1040 whether or not they were distributed. If performed services for the S Corp, some of those distributions probably should have been reclassified to w-2 compensation. If a federal and NYS S Corporation has to pay NYC corporate tax, shouldn8217t the S shareholder be able to exclude the S income from taxable income from NYC purposes I belive this is the case, but I can8217t figure out mechanically how to do it 8211 Nowhere on the NYS form that I see to adjust between NYS and NYC taxable income 8211 Is there are supplementary form Peter, This year we are doing our S Corp taxes at the last minute. Turbo tax. We distributed salary and also dividends based on estimated income from real estate sales that did not materalize. Now it seems we have a loss in the S corp. Is that ok Earnings are 30K and expenses are 33K. Your thoughts If it8217s right, it8217s okay. Some businesses incur losses. I recommend that in the future you hire a qualified tax preparer to help you do tax planning and prepare your tax returns, especially if you expect the business to grow. Peter, I am a 11.1 shareholder, with no basis, in an S-Corp. In 2008 my share of the K-1 stated corporate profits was 275k which along with my salary gave me a tax burden of aprroximately 96k. Not being able to pay this amount the corportaion 8220distributed8221 to me (typically no distributions are paid to me) in 2009 the 96k amount to pay the IRS. Question 8211 was this income for me that should have been reported in 2009 I need some help8230. This year, I elected to file as an S-Corp (I was previously running as a proprietorship). Over the course of the year I made all kinds of installment payments personally, so my FICA and taxes are covered. Here is the problem. If I understand correctly, I should have taken a wage and taken regular deductions. I then should have issued a W2 for my 8220pay8221. There is 130,000. in profit. I would like to split that 5050 between wages and distributions. But as of today, there is no W2. Is there some way I can report for 2010 and pay all the SE taxes on the salary 8230 or do I need to go back and file a very late W2 and pay the penalties Hope that all made sense. Any thoughts I am 50 shareholder of a s corporation and my partner has recently stated that she wants out. I put up all the financials to start the business. Overall, I am at a complete loss. What do I do I am reading this with much interest. My husband and I are 5050 owners of a S Corporation. My husband receives a salary and takes distributions. I am not getting a distribution and he says this is because I am not working in the company. I was extremely active in our business activities until I had health problems. Even though the corporation papers state that I own 50 and also the VP and Secretary of the corporation, but on the tax returns he is listed as the only stockholder. He stated that he thought the accountants had made some assumptions. There are many personal reasons for my concerns on this matter. I would greatly appreciate any feedback. I have a question. I have a S-CORP from which I made 2900 for the whole year. I have taken the whole amount as distribution and reported on my personal taxes and files a zero with IRS Should I be filing a k-1 also S-corp shareholder takes distributions in excess of stock basis8212-I8217m reporting them as capital gains on Sch D with no basis8211but are they taxed as ST or LT capital gains What is the criteria which decides whether excess distributions are taxed as ST or LT Code section Peter, I am 70 owneroperator sole producer of an S-Corp service business. My 30 shareholder has never contributed beyond his share purchase. He did loan start-up money, which has been repaid at 10 interest. We incorporated in 2005 and I built the business to gross receipts of over 300K annually. I travel away from home 40 weeks of the year to service accounts and typically work 50-70 hours a week. Last year I paid him distributions that equal 30 of profits since incorporation, as calculated by our CPA, equaling nearly half of his initial investment. My goal and intent to to provide him with at least 10 ROI. Is this reasonable I need to keep myself beyond reproach. My husband, my brother, and I just started an s corp. We do the adm work and an independent contractor does the service work. (lawn care). We use one room in our home for the office and use our car for local business trips. It does not look like we will be profitable yet. My brother told us the S corp can use 1099 MIS to pay us for our office expenses and car expenses and we would not take wages. Is this the correct way to handle this until the s corp becomes profitable I have inherited shares in a s type corp. and am being taxed on undistributed profit. No shareholders agreement that I am aware of. Do I have any recourse. The other two shareholders are very hostile towards me. They now plan on issuing two thousand shares of stock. Currently there are 100 shares-I have 33.3. Why the issue of add. stock Could that make my position weaker Help me if you can. Thank you I have owned 49 of an S corp since 2009 however have never received any salary or distributions yet the 51 partner has received salary along with a 30,000 distribution in 2009. In reading information about S corps it appears I should have received a salary amp a distribution commiserate with the 30K my partner took for his 51 ownership. It seems we may be in trouble with the IRS. Any suggestions on how we may be able to rectify this and satisy the IRS I have a twist on this issue. I own a significant of a S corp (CA) and live in NH. Distributions are taxed by CA as CA source income and then NH taxes them again as dividens. I prefer to take all profits as w2. At what point can CA say my W2 is to high and I must take some of it as distribution Any direction would be appreciated. The two CPA8217s I have paid have been unable to answer this for me. Peter, your tax savings is incorrect. Although you save on FICA by taking draws, your personal income tax is greater since the net income from the business is higher8230resulting in a lower net tax savings. Obrigado. I will check it out and make the correction. Thanks for posting this article. I have a quick question. I recently formed an LLC and am setting up my EIN and I want to know whether I should classify as a partnership (2 people involved), which is the default, or seek S-Corp status. I don8217t know whether the business will show a profit and therefore I8217m unable to anticipate a reasonable salary. I would prefer S-Corp status for ifwhen the business turns a profit and can take advantage of the distribution tax savings. Is it correct that if there are no profits that we would not be expected to pay ourselves a salary (and especially not every 2 weeks) and only if there is a profit then we should just classify a reasonable amount as W-2 income Or should we classify as a partnership and then change to S-Corp once the business becomes profitable Thanks for your help. Sounds like you know what you are doing. I prefer an LLC filed on a S Corporation return to a partnership. You are correct about the wage vs distribution issue. If you aren8217t taking any compensation at all, there is no issue. Once the corporation starts making profits before shareholder salaries and distributions, then you need to make sure you are paying yourselves a reasonable wage. Espero que isso tenha ajudado. This blog is really great, thank you so much Quick question from my husband 8211 he has an S Corp with 100 ownership generating 200K a year which he reports all as wages. The S Corp will now generate extra 50k 8211 would it really matter if he takes this unusual profit as a bonus vs. distribution if he has already exceeded the FICA threshold of 104K Thank you for your post, it8217s helping me navigate the S-Corp minefield, although I8217m still trying to get my head around things. I own 100 of an S-Corp. For 2009 I recorded 100 of my Income on employers federal tax return 941 (box 2 wages tips and other compensation) and W2 box 1. From this 100 i attributed 10 as distribution and recorded this on form 1120s, and recorded SS and MC taxable wages at 90. Did I record this correctly Or should I be recording distribution somewhere else I am also slightly concerned that an audit flag could be raised as my total salary and compensation amount on the 941 form does not match the taxable salary for MC and SS, and there is no where to record distribution on 941 Your example shows how to reduce federal withholding by recording distribution on schedule E 8211 But am I correct in thinking for 100 shareholders such as myself there is no benefit to doing this as the amount saved will be accounted for anyway on my personal Also, am I not leaving myself susceptible to penalties for deliberately reducing withholding Finally, my last account advised me (wrongly I think) that I can not allocate distributio ns as they need to be based on business profits from previous year I8217ve had 3 different accountants in the last 3 years and neither seemed to know the finer points of taxing S-Corps so am now doing my own taxes, so your advice is greatly appreciated. My husband and I are 50 shareholders in our S Corporation. What if the company has net loss for the month 8211 will it be okay not to pay us (as officers) a salary We pay our employees on a bi-weekly basis and tax deposits are paid to IRS amp EDD the following Wednesday. Do we as officers be deducted (tax) on a bi-weekly basis, too or quarterly Please advise. Obrigado. There is a savings even to 100 shareholders because the amount paid as a distribution is not subject to employment taxes. You will save 15.3 of your distribution amount. I am on a s-corp that currently has three partners which has ownership of 701515. now the 70 owner takes no salary and no distribution essentially they are a angel investor(they dont want in compensation) if i as 15 owner what to now take a distribution which i am paid salary and do all the operations. Is the 70 owner forced to take a distribution and if so does all three of the distributions have to be at the same time Hire yourself a good tax advisor. Never rely on the advice of a blogger who hasn8217t examined your books and records and previous returns. Having said that, you have to pay distributions in accordance with percentage of ownership. The timing of the payment of those distributions is not important, the fact of the distribution (record it properly on your books and records and tax return) is. Hi 8211 I pay myself a monthly salary as the sole employee of my corporation. At year end I will have a 8220extra8221 revenue in my corporation. Should I pay myself a bonus via payroll Or make a shareholder distribution If the latter 8212 what forms do I need to use Thanks I would need a lot more information before I would be able to advise you on that. I recommend you hire a qualified tax preparer to prepare your returns for you. Or at least hire one to bounce questions like these off of. Ok so what if the 70 doesnt have a salary, and i the 15 owner do and i want to take a 4 distributions throughout a year When does the 70 owner have to take there 70 distribution and what if the money is not there because the 70 is a hefty amount I am 100 owner of an S-Corp with 4 employees. I have always treated my own compensation as wages to avoid any question about the reasonable salary matter. I am two years away from sending my 1st ( of three) kids to college and am trying to strategize a bit relative to reporting income. I8217d like to minimize my reportable compensation to the extent legal and practical. Of course I can reduce wages, but the balance just lands on the K1, so no help there. I know I can put up to 25 of my salary into my SEP, but beyond that 8211 are there any other legitimate opportunities to reduce S corp net income that don8217t flow through my tax return With thanks, Stef There8217s a lot of things you can do. I recommend you hire a qualified tax attorney or CPA to help you with your tax planning. Thank you for all your great advice. I spent a couple hours reading all the information in these comments. I am a shareholder of a company that is currently a corporation. They sent all the shareholders a form 2553 to give consent to convert to an S Corp. All they said was here is a form we need you to sign8230no other explanation. I8217ve been researching what that means for me and it seem like it will not be in my best interest. Some background8230I received the shares when they purchased a productservice I created. I received some cash and some shares. They also brought me on as an employee at that time for a couple years but then I was layed off. Now I just have the shares. I have received some dividends (not much couple hundered here and there), but haven8217t recieved anything for over a year. I know they are having problems and have been down sizing. The main shareholders are all related and take month long vacations, etc. I realize they are trying to save taxes, but I don8217t get any profits from the company and don8217t want to have to pay taxes on income I don8217t receive. I have a lot of shares, but as a percentage I am pretty small compared to all their family members. What questions should I ask them to make sure this is a good thing for me. Also, what happens if I refuse to give consent Can they go around me somehow or will they have to buy me out Thank you, Marlo My husband is a 100 shareholder in an OH S corp but we live in PA. OH just audited our taxes for the last 4 years and said we owe back taxes for distributions under ORC 5733.40(A)(7) that basically requires above 20 owners to apportion income including wages paid by the entity. My accountant told us the fix was to get a credit from PA for the taxes paid to them and he filed amended returns. PA just denied the refund saying because we are not a PA S corp we can8217t get out of state credit on compensation. Is this right or have we just somehow reported things wrong I t can8217t be that we have to pay taxes to both states on this same income can it Wow, super helpful blog. Thank you so much I have a question. If a sole 100 owner of a S-Corp. buys stockbonds thru the S-Corp. and then sells it for a loss, can heshe deduct the loss on hisher personal taxes The loss passes through to the shareholder and is deductible to the extent of capital gains. If there are no capital gains, the shareholder can only deduct 3,000 per year. But consult a tax advisor. There may be some tax planning you can do. I have really enjoyed and benefitted from this post and thread. Obrigado. I am a 50 shareholder of an S-corp in Oregon, where myself and the other 50 holder both work (tirelessly) as salaried employees. We have 4 other employees. The problem we are facing is extremely fast growth. My questions: 1. Can shareholder employee8217s make a smaller salary than a non-shareholder employee 2. Do shareholder employees have to take a monthly amount as a salary For instance, if my books show a monthly standard amount over 12 months, could I have certain months be salary and certain months be re-payment of initial investment or even distribution, etc. 3. I have taken a small monthly salary, but because of rapid growth, am in a position to take a sizable distribution. If I take a large distribution it will be un-proportionate to my salary. Can I go back over this year and re-appropriate 8220what8221 my draws are categorized as Thank you so much. Thanks so much, this site is Great I am doing the bookkeeping for an S Corp with one owner. The owner takes money out of the corporation and invests it with e-trade and later puts the money and profits back into the company. How do I deal with these transactions and is some if it considered Income I have a question about an S-corp and paying wages and distributions. The company is small enough now where it only can pay the owner 2000 per month. This amount grows each month by about 125. However a fair salary for this work being done is 30,000 per year. Is it more appropriate to pay 100 as wages until the 30,000 per year is met Or it is fair to pay 60 of 2000 as wages and 40 as distributions I have a small (very small) s corp as the family business. We are three share holders. At the end of the year (after expenses) there was about 1700 left. We took no salary. For this small amount can it all be given out as distribution, or do we have to give salary too. It seems too much of a hassle to set up payroll for that amount. Por favor informar. Thank you Hello Peter, thanks so much for all the valuable insight provided on these posts. I incorporated my business in April 2011. Finally, received confirmation from the IRS that they approved my status as S corp tax structure in November. My question is how do I handle my taxes for the first 4 months of 20118230do I just treat myself as self employed and take use a 13 of my 1099 payments Hi Peter I just have a quick question. When you say that the distribution is not subject to FICA, but only subject to a regular income tax, are you referring to state income tax I8217d like to know what tax the distribution is subject to because in Washington State we have no state income tax. Thanks State and federal income tax. Thanks for answering questions for the last couple years. I8217m sure all of us are extremely grateful I know I am I am winding down my (single member) S-corp and have a question regarding the return of my initial investment. I think I could write the question very concisely, but just for clarity, I8217ll provide a concrete (dummy) scenario. Hopefully it won8217t take too much of your time. I distributed, say, 100,000 at closing, of which 60,000 was business income from this year, 30,000 was business income from previous years (which was, of course, previously taxed on my personal tax returns), and 10,000 was my initial investment. My basis was 100,000. (Obviously all of these numbers are after paying wages and associated taxes, providing W-2s, etc.) My reading is that on schedule K (and K1), I list the 60,000 business income and the 100,000 distribution. On my Schedule E, I list the 60,000 business income. And the 30,000 previously appeared on prior years8217 Schedule E. Does the 10,000 go anywhere Clearly the 10,000 is not taxed. If the distribution had exceeded my basis, then I understand that the excess would be a capital gain on my Schedule D. But since it was an exact return of my investment, do I even need to mention it anywhere Thanks so much for any input you can provide Hi Peter, I have an S Corp with myself as a sole owner and employee. My company made 120,000 last year: 8211 My expenses came up to 75,000 (due to traveling, etc). 8211 Payrollwages of 15,000. 8211 And the rest in shareholder distribution or net company profit (about 30,000). Does that sound like I should have ran more payrolls Is it too little payrollwages amount Thanks in advance. - Basil There is no fixed formula. Do you have any employees If it8217s just you, you might have a problem if you get audited, but I don8217t think the numbers are big enough to trigger an audit (assuming there is nothing excessive in your deductions). I have found that a 5050 split between wages and distributions is reasonable in most cases. Great blog, I have just sucked away a good chunk of my day reading all 247 of them and was able to learn a lot Thanks for taking the time. I think all my questions were answered but I have bookmarked your page to come back to Me and another partner have started a consulting services business that provides technology and business consulting for mid-size businesses. I am located in Minnesota and my partner is located in Wisconsin. We have registered it as an LLC in MN and foreign LLC in WI. Our business has operating expenses that can range from 10-30 depending on technologies we may have to leasebuy for projects and if we have to hire 3rd party resources to execute a portion of the work. We have plans of making 400,000 in the first year as revenue but we are not sure of how much our expenses are going to be. Also we would like to have some decent wage. We are planning on paying ourself 65000-70000 as the annual salary(Salary data) IRS classified as partnership when we requested an EIN. But we have been suggested to convert as an S-Corp by our accountants. The accountant actually provided two options but recommended S-Corp. The two options are 1. Stay as partnership and setup guaranteed payments equal to the wage amount. Take the rest as profit shared by two partners after expenses at the end of the year. We were told that we will have the flexibility to split the profit depending on a formula rather than the 5050 capital contribution. By doing this, it seems we will save some money on self-employment taxes. 2. Convert to S-Corp and pay salaries based on an hourly rate and hours worked by me and my partner. At the end of the year take out the profits as a distribution 5050. Our accountants suggested with an S-Corp we lose the flexibility of sharing the profits at a variable rate but we can still save some self-employment taxes. What do you recommend Is our accountant accurate or do you guys any inaccuracies in both the options. Thanks for your time and I look forward to advice. First of Peter, kudos to you for keeping this comment section running. This has to be one of the longest in web history (so much that I couldn8217t keep reading them all) I have 2 questions: 1) If no distributions are paid and Net Income remains in the business for at least a year, can the S Corp pay the taxes for the shareholder by stroking a check and eliminating the cost burden on the shareholder (versus the shareholder having to pay from pocket) 2) In 2012, have the tax rates changed for FICA, Medicaire, and Social Security on an S-Corp Thanks for visiting. I assume you know that S corporation profits are includible in the Shareholders8217 adjusted gross income whether distributed or not. If the S corporation has the cash to pay the taxes for the shareholders, it has the cash to make a distribution to those shareholders in the same amount so they can meet their tax obligations themselves. Distribute the cash rather than have the S corporation make the tax payments directly. S corporations and their employees pay employment taxes at the same rate as everyone else. I8217m a minority owner of an S corp. (1090) in the state of Virginia. The business incurred a loss this past year. Can we split the loss 5050 or does it have to be split in proportion to ownership Majority owner agrees on an even split. Peter, Great site. My wife and I are the two shareholders in our corporation, created in November 2010. We created our corp intending to elect S-corp taxation. We filed IRS form 2553 to elect subchapter S tax treatment for tax tear 2010. Our corp had a small loss for 2010 (startup costs, no income) so we passed through that loss to our personal income, but it was limited to each of our bases of 500 each (joint return, so 1000). Fine, whatever. In 2011, we also elected to be taxed as an S-corp, and our corp had income of 44000, about half of which was paid to us as wages. The profit of the corp is about 20k, and sits in the corporate bank account. My wife and I also have other jobs totaling about 80k. We have taken no distributions. We will pay pass-through federal personal income tax on the S-corp profit of 20k at our marginal rate of 25. We will also pat state (HI) personal income tax on the pass-through. Together that appears to be more than the C-corp taxes the corp would pay in federal and state corporate income taxes. We all know that the first way S-corp status saves the shareholders of a small corp who also are employees is by avoiding federal payroll taxes (FICA) and state unemployment insurance, etc. on the part of the corp income that is not paid out as wages. The second way is supposed to be avoiding 8220double taxation8221 on C-corp dividends as opposed to S-corp distributions. I have read many times about avoiding 8220double taxation8221 by electing S-corp status. But it seems that if our S-corp issues distributions to us, we will still have to pay long-term capital gains taxes on the increase in value of our bases on our personal income taxes. It seems that maybe we, as the directors of the S-corp, should have issued a distribution of most of the S-corp profit, so that there would have been little profit to pass-through. Then we, on our federal personal income taxes, would have had little pass-through income taxed at our federal marginal rate of 25, and more of capital gains income taxed at a maximum of 15. I had thought that because we had paid the federal S-corp income tax as pass-through, the S-corp could later issue distributions with no tax because the tax had been paid. But so far I see no way that that S-corp distributions are not taxed to the shareholders. Am I missing something Thanks Wow. Great question. I had to think about that one. You are only taxed on your distributions to the extent they exceed your basis. S corporation shareholders get taxed on their share of the corporations profits whether distributed or not, consequently, distributions are, in most cases, irrelevant. Sometimes, however, a distribution can create a tax liability for a shareholder. To understand this you have to understand the concept of Basis which refers to the amount the shareholder has invested in his S corporation stock. If the shareholder purchased shares in an S corporation for, say, 10,000, at that point he has 10,000 of basis in his stock. If over the course of the first year of operations, his share of the S corporations profits is, say, 20,000, that 20,000, if reinvested, increases his basis from 10,000 to 30,000. If the corporation has zero profits in year 2, but distributes 16,000 to the shareholder, the distribution decreases the shareholder8217s basis to 14,000 (30,000 minus the 16,000 equals 14,000). Here8217s what all of this means. If an S corp makes a distribution to the shareholder that is in excess if the shareholder8217s basis, the excess is treated as a capital gain. So, in the example above, assume the corporation makes a 15,000 distribution. Since the shareholder had basis of 14,000, the extra 1000 is treated as a capital gain on his personal tax return. So, although distributions usually dont have any tax effect to shareholders, sometimes they can create capital gains. We see this often, for example, in the case of the small corporation that has used Section 179 depreciation to create large depreciation deductions. This deduction can eliminate a lot of basis quickly causing distributions to exceed basis and the triggering of capital gain. Espero que isso tenha ajudado. But I do think you need to hire a qualified tax planner (CPA or Tax attorney or very experienced Enrolled Agent) to help you navigate the tax laws. A good one will save you more money than he charges in fees. And you8217ll have peace of mind, to boot. Olá. Great site. I currently have a business that teaches horseback riding lessons to people8230.it is currently doing 40k gross per year and is operated as a sole proprietorship. My taxable income is only 17k after expenses and deductions. In regards to getting loansmortgages from banks, this is a problem. Banks look at the net taxable income for the self-employed, instead of the gross amount of income showing on employee8217s w28217s. I am about to expand into running a complete full horse boarding facility. I am to lease-to-purchase a property on a three year contract for 375k with the first year option. I potentially have an additional 54k gross yearly revenue lined up with business to start next month. I will have two independent contractors that I will be paying. My goal is to be able to get lending as soon as possible for this property. I know that I need the protection of a corp but I am curious of the ways in which it might help in other ways. Ways that might help me to get financed quicker. From what I understand I would get a w2 from the S corp and file personal tax returns separately right If I were to pay myself a salary that wanted to achieve my goals of being able to get financed, I would hurting myself too wouldn8217t I Or would the benefits of distributions still be able to work in my favor I cannot tell you how much I would appreciate any and all thoughtsanswers to this question. My husband has been a minority shareholder in an S corp (S corp since formation 20 years ago). Happens to be a family biz where he was screwed by big brother. They will not buy out his stock, he has no idea initial formation documents (my guess is there were none but could be wrong). Corp making tons of money. Husband is not working in corp although he did for many years. No distributions made, ever, except to cover hubby8217s taxes (and they are made equally to all shareholders). Is there any recourse whatsoever against the majority shareholders for the money my husband supposedly made in taxes (had to report on his taxes via k-1). I8217m not very knowledgeable about tax terms at all, but and just wondering if I have overlooked something. Is this proper Forever Or is this tax evasion on the part of the majority shareholders Corporation had approx 500 K in profits last year, have performed similarly for many years (actually better before economic decline). Please tell us8230should we consult an attorney Is there any recourse for making them purchase the stock Or pay distributions Or pay the money they claim they paid my husband Can they just continue to claim they are paying us amounts they aren8217t paying. Is that normal Customary for s-corps My husband seems to think so. That just makes no sense to me. I would greatly appreciate any thoughts or advice p. s. state is Florida. I would greatly appreciate learning if this arrangement sounds typical8230forever not distributing funds. Hubby has never agreed to forego distributions or reinvest profits into the company. Please tell us8230is this worth pursuing Does he have any rights to the supposed profits he 8220earned8221 Or any way in the world to force them to buy his stock Thank you Your husband has recourse. He can sue them and the S corporation for his share of the profits. What percentage of the S corporation does he own Is it still in business Are there any assets Do the other shareholders have 8220deep pockets8221 Is there a shareholder8217s agreement Did your husband sign it Where is the S corporation located You will probably have to file suit there. Before you file suit, however, you will want to send a demand letter to the other shareholders and the President of the company demanding to be allowed to inspect the books. They might offer to buy your husband out and that would be preferable to a lawsuit assuming the offered purchase price is fair. I am questioning, if a majority minority owner(s) is not an active manager. The new business manager does not make distributions as have been done in the past. There is a claim of economic instability, but there is cash in the bank and profits. Is there a way to get distributions in order to cover taxes for the company having been or to be carried over by K-1 Thank you. Reading this has been an education. I wish that I had found it earlier. I was a part owner in a company for seven years. At the beginning of 2011, the three current owners (I was the middle with about 25) decided to change to S corp status. I decided to leave in the summer 8211 at the end of August and was promised distributions to the end of my employment. I am now told that the books are only quarterly and that I am entitled only to distribution to end of June. Is this standard practice My husband and I are the sole shareholders in an S Corp established in 1997. The company has never had a profit. We have never taken wages and loaned the company the money to stay in business, approximately 140,ooo. These loans have been through credit cards first (60,000) and then a home equity loan line of credit on our vacation home (80,000). These loans have been been put in writing. My first question is, can the interest paid on the HELOC go as a deduction for the S Corp (the loan and property are in our names not the company) rather than our personal taxes. The second question is if the company makes money this year should we take wages, distributions, or loan repayments I own 100 of a NH S Corp that does all consulting service delivery outside of NH (however I pay wages to myself in NH). The balance of my profit is distributed to myself and reported on my federal 1040. My question is, do I have to pay NH corporate income tax on those profits even though all of the work was done in Florida Peter, I have had an s corp for 11 years, loaned it money in lean times and now while it is doing better I want to recoup some of the loan money. Since my s corp has a profit do I include the loan repayment as an expense in order to reduce the net profit or is it handle solely on the k-1 Thanks, Lynn Only the interest, if any, on the repayment of your loan to the corporation is deductible. Principal payments are not. It won8217t appear on the k-1 either. Of course, repayment of the loan will reduce your basis in the S corporation. It8217s a tad complicated. I think you should hire a qualified CPA or tax attorney to advise you on all of the implications of your loans, repayment of your loans, etc. Hi Peter, great resource. Thanks for keeping this going I have an 8-year old s-corp. 2011 is the first year with a loss 8211 750. I8217m the sole 100 shareholder. Shareholder basis has always matched company Retained Earnings. Now both are down to 16. So I will only be able to take a 16 loss on personal return. I8217m wondering how to report this, along with 75 of Section 179 depreciation. Schedule E has separate columns for Nonpassive Loss from K-1 and Section 179 Expense. I8217m wondering where to apply the 16 8211 against the Nonpassive Loss or against the Section 179 Expense Or am I able to deduct the entire 75 Section 179, with the 16 deduction applied against the Nonpassive Loss I just incorporated to a S-Corp this past April. I guess my big question is, should I have issued myself a W2 and reported my (Ordinary Business Income) as my wage on my personal Not even sure if that is the right question..I8217ve gotten SO MANY mixed answers8230 PLEASE HELP I really need more information. What kind of business is it Are there other employees who generate revenues Etc. Generally, you should pay yourself wages and witthold the various payroll taxes from it. If you haven8217t done that, you could send yourself a 1099 and report that amount on your 1040 as Schedule C income and pay the 15.3 payroll taxes that way. The issue is complex so I suggest you hire a qualified CPA or tax attorney to advise you. Hi Peter. I have question about how to fix one person8217s S corporation salary 8211 it is too low: 12K 8211 wages and 23 left for distribution. How to make 12517-wages and 23-518- distribution. Obrigado. I have been self employed and established a sub s corp years ago. I recently took early retirement at age 62 and early ss benefit. I continue to do limited work paid to my sub s to help circumvent the early retirement wage limitation ie 14m. As sole owner I understand I must take some w-2 wage and of course take distributions. Unlike distributions, dividend income etc which are excluded from wage limitation, IS the w-2 income thus received going against my wage limition threshhold. E Question 8211 The Employer pays portion of the FICA taxes (in the second case): 3,060 . So the federal taxes that will be paid on the shareholder distribuitions (40,000) will be on 40,000 8211 3060 36,940 Or on the full 40,000 Peter, I own about 75 of a s corp. The company pays my health insurance. because this is a S corp I have to claim this amount of teh health insurance as gross income. Does this additional income count towards the gross income when applying fo a mortgage Amazing blog post and blog. I have a question that I put in google and brought me here, but could not find the answer in the comments section. I have a delaware incorporated S corp (formed 2008) Either last year or the year before but I am only interested for last year. I gained 60 ownership of the company, however I only took out 50 of the distributions or profit with the other partner who owns 40 taking the other 50. Now this year I am realizing I made a mistake by only taking out 50 since I ended up being responsible for 60 of the taxes, as per the tax filings showing I own 60. Can I take out from this years revenue profit the difference I am owed from last year In addition to our normal 6040 meaning if we have 100 and I am owed 20 from last year can I take out the 20 first then split the remaining 80, 6040 Can my partner legally have any recourse Will I be taxed even more this year since the IRS might say that the money I took out this year even though was for money never taken last year still taxable on this years return Great Site, I have a question. We have an S corp which we are 50 owners of. The company had a profit of 80,000.00 last year, 40,000 of that will be added to my personal tax return and the company is suposed to give me and my partner the funds to cover the taxes on the 40,000 profit. What happens to the 40,000.00 Does the company owe that to me less the taxes it paid since it was added to my personal return or does it sit in the company account Should I be entitled to receive that money tax free since I already paid the taxes on it Thanks For Your Time I am planing to form an S corporation and give two employees 5 of the company. Can I legally have an agreement in place that they would have to stay with a company for a certain period of time and perform certain work or otherwise they lose their 5 If yes, what would I sign In an S corp with one officeremployee, can the corporation make contributions to an HSA for this officer And if so, how are they reported I have read the IRS publications related to this, and it seems that it can be done if it is for the purpose of compensation of services rendered. I understand that it cannot be done on a pre-tax basis and is subject to employment taxes. Just wondering how to record this in the financial records and how to report it for tax purposes. Thank you in advance for your time and help. I am a bookkeeper for an S Corp. Two equal shareholders that draw a small salary each with is FICA taxed. They use distributions as well. What kind of account would the distributions be and how would I 8220map8221 that for income tax preparation Also, is this distribution account to be closed at year end Hi Peter, amazing content here 8211 thanks for all your time in responding. Question is, during the first year that we started the company (an s-corp), we did not withdraw any salary or distributions. This said, does the non-paid salaries increase the stock basis I recently started a bookkeeping position for an S Corp with one shareholder. Upon reviewing the Balance Sheet I noticed a sizeable Note Receivable-Officer account with no record of repayment being made. Journal entries from prior tax years show yearend adjustments by from the Owner8217s Draw account to the Note Receivable account. The shareholder claims that a repayment is unnecessary as they were only adjustments, and terms were never established for repayment. Are there adverse tax implications here or accounting violations in having this note receivable remain on the books or could it be cleared by adjusting it back to the draw account Thank you in advance for any advice you can give on this matter.