The IRS requires S-Corp's shareholders who work in the company to be paid a reasonable salary.
The salary and employer's payroll tax are claimed by the S-Corp as business expenses, so the profit reported on your K-1 will be lower. The S-corp has to issue you a form W-2 which you report in the Personal section of TurboTax.
The profit of the S-Corp will "flow through" to your personal tax return through the K-1.
Distributions to the shareholder do not lower the reported income of the S-Corp. They are reported on form K-1 in Box 16 Code D. On your personal return, distributions do not count as income as you have already been taxed on the profit of the S-Corp through form K-1.
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