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Started an S-Corp last year and took no salary or

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Started an S-Corp last...

Started an S-Corp last year and took no salary or Distributions. Closed out the books last night and made a net $7,000 and want to recognize my salary (along with taxes) and the required distribution of the remaining earnings. However, I want to keep the entirety of the money in my S-Corp to cover expenses for this coming year. How do I do that?

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

Not that I am aware of

Submitted: 1 month ago.Category: Tax
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Answered in 5 minutes by:
3/18/2018
Tax Professional: Barbara, Enrolled Agent replied 1 month ago
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 5,801
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

S corporations are pass through entities, which mean any profit/loss is passed through to the shareholder. It does not matter if you keep the net profit of $7000 in the business or not.

Once you complete the 1120S, a K-1 will be generated for you. The information from the K-1 gets entered on your personal tax return (Form 1040).

You will pay income tax and self employment tax (Social Security and Medicare) on the net profit.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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Customer reply replied 1 month ago
Thank you for the quick reply. I was aware what to do, but not how to do that. I have TurboTax for Small Business and want to know how to complete the required filings. Can you guide me please?
Tax Professional: Barbara, Enrolled Agent replied 1 month ago

You will start with Form 1120s in the TurboTax Business program.

Enter all of the information required.

TurboTax will guide you regarding the information to enter.

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Barbara
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