Distributions aren't generally income to you as the shareholder, and they are not deducted as an expense (just like dividends aren't deductible). Since you are taxed as an SCorp, you pay income tax on the net income of the business whether you take the money out or not. You are not taxed for actually taking the money.
Income distributed to you via Form k1 increases your basis. Distributions decrease that basis. You are personally only taxed when you take money out beyond your basis (investment, net income), which isn't that common.
To indicate that you have received a distribution:
- Go to Business Info
- Shareholder Information tab
- Click Done Entering Shareholders from summary screen
- "Yes" the corporation made distributions to shareholders
- Put the total amount on the next screen
- This will carry to your K1, Box 16D items affecting shareholder basis
