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MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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My wife is the 80% holder and President of a S corp ( california).

Resolved Question:

My wife is the 80% holder and President of a S corp ( california). She received about $ 40,000 last year. How much of that has to be considered salary and Payroll taxable and how much can be declared Profit?
Submitted: 4 years ago.
Category: Tax
Expert:  MequonCPA replied 4 years ago.
Hi and welcome to JustAnswer:

For salary, she should have received actual paychecks which would show gross wages and withholding. She also should have received W-2 for the year.

Amounts she receives as distributions generally are not taxable. However, she should receive a K-1 from the S corp that will report her percentage of the income.
Customer: replied 4 years ago.
I think I need to explain further. I own another 10% and we have a 10% partner. We have not received any $ by choice. We did not/ have not known how to classify salary or distributions or the difference so we need to know how much of each is proper? Sorry if I was not clear
Expert:  MequonCPA replied 4 years ago.
You have a complex situation. It requires more time than I currently have available. I will opt out so another expert can assist.
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