I'm an LLC with S-corp status. I have not been issuing myself a W-2. All I've been doing for 'owner draw' is to transfer some money monthly from my business account to my personal account. Forget I ever mentioned 'sole proprietorship'...my bad on the lingo/misunderstanding.
I did some research and now here is my understanding. I earn money in two ways when I own my business: Distributions passed through S-corp as an owner. These are not treated as self-employment income. And Salary, the money I pay myself as employee of the S corp. The owner draw I have been referring to is this 'reasonable salary'.
If LLC gross revenue is $200K, salary is $80K, and distributions are $120K (I may adjust this ratio based on 60/40 rule or further market research), please clarify where in TaxAct do I enter these numbers? All I see under Business is 'General Business Income', but where to distinguish salary from distributions?
