@ThomasM125 @JeffreyR77 @Irene2805 @gloriah5200 @edmund360 This post was quite informative for newbies. I am doing my first 1120S K1 entry into my 1040 using the premier 2020 version.
Newbie Question: Why IRS is taxing all my 1120-S K1 Part III Line 1 (Ordinary business income) on my 1040? I made zero distribution to myself ( via Section 16 d or 17). I have already paid myself a W-2 thro' my S-Corp. So every year in S-Corp, you pay IRS taxes via S-corp pass thro' ordinary business income and W-2 on your 1040. Is that correct?
Is there a way to avoid annual income tax on ordinary business income which is kept in the business account as a cash reserve for unexpected future expenses?
Thank you in advance for your feedback.
