DavidD66
Expert Alumni

Get your taxes done using TurboTax

What is meant by "pay taxes at the stockholder level..." means the S-Corp business is a Pass Through Entity.  It does not pay federal income tax on its profits.  Instead, the profits (or losses) are reported to the owners on Form K-1, which the owners report on their personal tax returns.  Income from the K-1 is included in the owner's taxable income on Form 1040.  The owner is responsible for making estimated taxes if necessary.  I recommend you file your business taxes and your personal taxes for 2022 as soon as possible.  As for paying the owner a salary, when the S-Corp makes a profit, the company is required to pay the owners that work in the business a reasonable salary.  You are not just an S-Corp owner if you provide services to the business, you are an employee and have to treat yourself as an employee, which means paying yourself a reasonable salary.  Form more information see the following IRS web page:  Reasonable Compensation 

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