Question about single member owner of an LLC taxed as an S Corp and owner distributions

teleserv · Aug 13, 2022 6:57:24 AM

<P>I am a single member owner of an LLC taxed as an S corp. I pay myself a reasonable salary, and also recently started taking distributions. Let's say my company has $200,000 in net profit at the end of this year, and from that next profit I took distributions of $50,000 (on top of my salary). In that scenario, when I file the business taxes would I pay taxes on the full $200,000 and would I then also have to pay personal income tax on that $50,000 in distributions? Or, would the business only be taxed at a profit of $150,000 and then I would pay personal income tax on the $50,000 in distributions?</P>

2763970

Connect with an expert

Question about single member owner of an LLC taxed as an S Corp and owner distributions

@teleserv wrote:

@Anonymous_ because it’s too high or because it’s too low?

Too low as in not enough taken as a salary. Note that there is no exact amount that is required; it only must be considered "reasonable" under the circumstances.