How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Megan C Your Own Question

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 12139
Experience:  Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
Type Your Tax Question Here...
Megan C is online now
A new question is answered every 9 seconds

I am a real estate broker in California. I recently formed

Resolved Question:

I am a real estate broker in California.

I recently formed a S Corp. I am the only share holder.

My wife works with me as a real estate agent (she is technically an independent contractor).

I want to start receiving a pay check.

I want my wife to start receiving a pay check.

I would like any earnings left in the account at year end to be "redistrubuted"...but I dont understand the tax consequences for this since the money that would remain in the account would be used for future payrolls and it would have already been taxed...I think.

Please help.

Thanks,

Mike
Submitted: 8 months ago.
Category: Tax
Expert:  Megan C replied 8 months ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

Hi, Mike - the cash that is left over in your account can be used to reinvest in the business or pay expenses

Megan C :

You will not have to pay tax on that money again

Megan C :

You only pay tax on the profit of the business

Customer:

so we would claim the "redistribution" on our personal taxes?

Customer:

Does it matter that my wife is not a share holder?

Megan C :

No, you do not claim any redistribution on your personal taxes. You just pay tax on the profit of the business. What you do with that profit is up to you after that

Megan C :

No, it doesn't matter that your wife is not a shareholder - she can still earn a salary from the business.

Customer:

and when I say "redistribution" i mean...leave it in the account to account for future payroll.

Megan C :

That's fine...you aren't taxed on that

Customer:

this may be another question...but...when we each receive a salary...am I the only one paying self employment tax?

Megan C :

With an S Corp you don't pay self employment taxes. You pay payroll taxes (same thing) but you pay them both on your salary and your wife's salary

Customer:

but the money that would be left over would not pay self emplo0yment on

Customer:

right

Customer:

?

Megan C :

That is correct. You only pay that tax on the salary

Customer:

thank you for your help :)

Megan C :

You're welcome.

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 12139
Experience: Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
Megan C and other Tax Specialists are ready to help you
Expert:  Megan C replied 8 months ago.
Thanks, Mike for your positive rating. Please come back and visit me any time you need a tax question answered. It was a pleasure working with you today.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.