@jpgroup wrote:
...tell me the difference between "salary" and "distributions"? Is the latter (distributions) reported to IRS in Dividends via 1099-DIV's, and if so (getting back to my earlier box example on the 1099-DIV form, which box do I enter my total lump sum YTD amount in?
Salary is compensation essentially for services rendered. In terms of an S corporation, the shareholder-employee receives a paycheck (of sorts, since there is no requirement that it be issued on a regular basis) with payroll (and withholding) taxes deducted (and the other half being paid by the corporation) and a W-2 at the end of the year.
S corporations generally just issue Schedules K-1 on which income, gain, deductions, credits, et al, are passed through to the shareholder(s). You probably are already aware that the shareholders are taxed on the income passed through from the corporation regardless of whether there is a distribution, a distribution being nothing more than the transfer of money (or other property) from the corporation to the shareholder.
