CA LLC taxed as an S Corp, wondering tax implications for dividend distribution. Wondering how its taxed, lets say salary is 45,000 USD and 100,000 in dividend.

First of all, the IRS scrutinizes salaries for officers of S corporations closely and those salaries must be reasonable (and a $45,000 in salary based on $145,000 total does not sound like a reasonable salary)

Regardless, the corporation deducts your $45,000 salary on its tax return (1120-S) but your tax liability would be based on both your salary and the $100,000 in net income (i.e., it is combined).

@Rick19744 

@luuinhaler the distribution is not taxed unless it exceeds your tax basis in the S-Corp. 

I agree with @Anonymous_ in that you need to consider tax guidance on what may be "reasonable" wages given your business model.  This area is a facts and circumstances situation.   If this is more along the lines of a consulting business or where your services are what drives the business, then I would also agree that the 45/100,000 wage and distribution ratio may not pass an IRS exam.

Additionally, your distributions will not be taxable as follows:

• to the extent that your accumulated adjustments account (AAA) is positive
• you have tax basis

Finally, you also need to be aware that the AAA cannot go negative as a result of distributions.  So there can be instances where the distribution reflected Sch M-2 will not agree with what is reflected on your K-1.

There are many other nuances with S corporations, so you may want to meet with a tax professional to get an understanding of how everything flows sooner rather than later.