Yes, you still get taxed. It's the best kept secret of the IRS. SMB's get taxed for money they'll never really receive. The business requires cash-flow, so the end of the year profits cannot be distributed and many ever be. The IRS still gets the cut. I've been a business owner for 8 years and haven't come close to taking a full distribution but **bleep** if the IRS didn't get paid. The whole system is corrupt. Would love to hear from other business owners on how they deal with this. There has to be a way to minimize your tax liability legally, especially when you never receive that income.
