Understanding S Corp Distributions: A Simple Guide for Business Owners

(See how much you could save on your taxes)

For Businesses that are profitable, and the goal is to take the profit out of the company in a tax efficient manner, S-corp is a great tax designation to elect for your business., potentially saving thousands depending on the level of profitability of your business.

Fees are as follows $29 + state fee + $9 for BOI (this optional but recommended as failure to do so can result in a fine of $500/day)

Fees are as follows $89 + state fee + $9 for BOI (this optional but recommended as failure to do so can result in a fine of $500/day)

Recommended formation service - We have negotiated with Northwest to provide the best discount and packages for our users, we get compensated when users use our discount links.

🧮 To see how much you can save by forming an S corp check out our Scorp calculator:

S Corp distributions are like a paycheck or bonus that owners get from their business's profits. They have some tax benefits, making them a popular choice for many business owners. Check out our video to learn how they work and if an S Corp makes sense for your business!

Time Stamps
0:44 1 What is an S Corp
1:43 2 Reasonable Salaries
2:21 3 What are Distributions?
3:10 4 Distribution Tax Rate
4:15 5 How Much Distributions to Take?
5:56 6 Reporting Distributions
6:59 7 Examples
8:03 8 Key Takeaways

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🎥 S Corp vs LLC

📝 What is an S Corp written guide:

#scorp #distributions #taxes

[HowtostartanllcOfficial]

For Businesses that are profitable, and the goal is to take the profit out of the company in a tax efficient manner, S-corp is a great tax designation to elect for your business., potentially saving thousands depending on the level of profitability of your business.

(See how much you could save on your taxes)

Fees are as follows $29 + state fee + $9 for BOI (this optional but recommended as failure to do so can result in a fine of $500/day)

Fees are as follows $89 + state fee + $9 for BOI (this optional but recommended as failure to do so can result in a fine of $500/day)

Recommended formation service - We have negotiated with Northwest to provide the best discount and packages for our users, we get compensated when users use our discount links.


🧮 To see how much you can save by forming an S corp check out our Scorp calculator:

[nickhong]

I spoke to three CPAs today about this matter, and none explained it this clearly. The picture you showed (Distribution, Reasonable Salary, Money in the Bank, Income Tax, and Self-Employment Tax) was THE ticket in providing the thorough explanation of various differences between Distribution and Salary. Thanks for that, and thank you for speaking in plain English without losing us, non-accountants.

[aarongoldsten]

I watched like 5-8 videos on this topic. This is the best one. Right to the point and easy to understand

[eversunnyguy]

Best explanation I ever heard for starting S-Corp

[diemtrangthuyduong]

Best explanation for S-Corp. Thank you so much.

[josephinebardot]

Thank you a lot for this video. This is very interesting and informative. Keep posting like those amazing videos, this is awesome.

[mariabell]

It is a great video thanks for the great information and well delivered. This is exactly what I was looking for.

[jacobharris]

Phenomenal video! Thank you so much this was super helpful you are awesome!

[CryptoQueen]

Thanks! For taking time to replying to my questions!!!

[samueldelaespriella]

I loved this video, it should cap "but wait, there's more" !

[franciscomaldonado]

She GO hard in da paint!!! Thank You !!!

[lauraize]

Thanks for this video she explains to the point.

[mjfontec]

Thank you for this video, extremely helpful! Two questions - when can an S-corp take a distribution? And is there a time period before it can take its first distribution?

[sikhswim]

This is the best content I have seen on this topic! Thank you!!!! This is amazing. Question: Can one take distributions along the way -- or is it something that happens at the end of the year?

[FLORIDIANMILLIONAIRE]

The currency flow diagram is cool..Is the income tax FICA taxes (Medicare and social security) and self employment tax (FUTA taxes for unemployment) ? Also for a single member S Corp money in the bank means which bank the company bank or the single members personal account?

[davedwave]

Thank you for this. Do you have a video on Retained Earnings? Do we pay taxes (like a disbursement) yet keep it in the company

[ivanblazhenko]

Best explanation without doubt.
Just have one question is that correct that it is possible to take all money as a distribution and don't pay yourself salary if net profit was let's say 30k and it was first year in the business? If yes how many years are Okay to be on that low profit? 1-2-3 before the business will be considered as hobby or so

[designrama]

Clear and precise! Thank you. Example #2 7:42, let's say corp net profit is $100k and average reasonable salary for the role is $120k. Instead of paying yourself $100k as salary, could you pay your $60k as salary and $40k in distribution as compensations?

[iamanovercomer]

Very clear information 👍 . My question is do I need to be a llc before I can be a s corp ❓️

[mattlcosio]

Thank you for this video. Very clear and concise. I have a questions about the definition of a shareholder distribution - Are any profits/losses in the S-Corp that are passed through to the individual owners' tax returns considered the distribution or is it only profits drawn from the business bank account that are considered distributions?