Hi,
I am doing an S-Corp for my business this year. I have decided to only do it for this year.
I am sole proprietor, so for basis, to keep it simple, I am the only employee and everything gets paid out to me 50/50 (50% Salary, 50% distribution). I will do as follows (sample figures):
Initial contribution: $0
Earnings: $120,000
Expenses: $20,000
Of the remaining $100,000,
$50,000 to Salary & $50,000 to Distributions
I assume that TT Business will then fill out K1
Would you tell what boxes should be filled in for this example on K1?
Perhaps something like:
Box 1: 100,000
Box 16D: $50,000
What box does $50,000 Salary go into on K1?
Also, would you explain why it is bad to keep a chunk of $50,000 undistributed? This would save money on taxes but I think you have to distribute it at some point in a future tax year.
Thanks
