I own a dog training company, an LLC in the state of Florida. When I collect payments from my clients it goes into my business checking account. From there I pay myself by moving the money from my business checking to my personal checking account. Under the "wages & income" tab which amount do I report?
Ex: In 2020 my company made $5,000 but I only "paid myself" $1,000 by transferring that money from one account to the other.
Do I report $5,000 or $1,000 in the "Wages & Income" tab while filing with turbotax?
(numbers used are just for the purpose of this example.)
You must report the net income of the business on your tax return ($5000 from your example).
If the business is a single-member LLC, then the income and expenses are reported on Schedule C of your return; if there are other members/partners of the LLC, then you would report your share of the earnings from your Schedule K-1 of the business' tax return.
(The amounts you withdrew from the business account are not considered income - they are withdrawals or distributions).
If you are filing a Schedule C for self employment or as a Single Member LLC or Sole Proprietor, etc. you cannot take a withdrawal or salary and include it as an expense on your tax return. You are not an employee of the business. You don't pay yourself or enter a salary or withdrawal for yourself. All the business income and expenses are your personal income and expenses in the first place. You just fill out a Schedule C. The net profit or loss is your income. If you have a net profit of $400 or more on schedule C you will pay SE self employment tax on it in addition to your regular income tax. It's all included on your personal 1040 form.
You don't enter your pay or withdrawals on schedule C or into your tax return at all. And you don’t include it as income anywhere else.
See Schedule C instructions page C-10 Line 26
Do not include salaries and wages deducted elsewhere on your return or
amounts paid to yourself.
https://www.irs.gov/pub/irs-pdf/i1040sc.pdf