Retained Earnings

Forum|Forum|3 years ago
December 18, 2022
2 replies
10 views

LLC filing as an SCorp. Very simple business (no inventory, owner employee, selling online non-tangible products, no assets/liabilities)

All profits distributed except for $10K end of year bank balance (beginning bank balance was $0)

Is the $10 K my Retained Earnings

Anonymous_

Level 15

Is this your first year in business?

@Rick19744

Rick19744

Level 13

If this is your initial year in business, then this makes sense.

If you are not using some type of software for your record keeping, I would recommend you do so. QuickBooks would be a good choice. Using a software such as this, you would be able to print out a balance sheet and then compare it to your Schedule L on the tax return.

However, you indicate that all profits were distributed.

Are you taking a salary? If not, you definitely should be looking into this, as this is a hot topic and a priority review program for the IRS.

This forum is not conducive to determining what is a "reasonable" salary, this is only a recommendation that you should probably considered taking a salary.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.