Paying myself through an S-corps

unnecessarycomma
unnecessarycomma Member Posts: 3 Newcomer
edited December 10 in Live Q/A Event

I have an S-Corp that has been in the red for a couple years now. When I do start turning a profit, at what point (dollar amount?) do I have to start claiming what I withdraw as income? I live in California.

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  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 340
    Answer ✓

    Hello,

    Income (and losses) reported from an S-Corp are pass-through income and losses, meaning they pass through to the owner. You need to have someone prepare a Form 1120-S for you. Any income the company earns will be reported to you on a Schedule K-1. If you are on the company payroll, then you would report the W2. You also report the Schedule K-1 and any earnings will also be reported on your return.

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