Where do I place Officer Withdraw on the 1120S and K1 form?

[Pankaj]

@ThomasM125 @JeffreyR77 @Irene2805 @gloriah5200 @edmund360 This post was quite informative for newbies. I am doing my first 1120S K1 entry into my 1040 using the premier 2020 version. 

 Newbie Question: Why IRS is taxing all my 1120-S K1 Part III Line 1 (Ordinary business income) on my 1040? I made zero distribution to myself ( via Section 16 d or 17).  I have already paid myself a W-2 thro' my S-Corp. So every year in S-Corp, you pay IRS taxes via S-corp pass thro' ordinary business income and W-2 on your 1040. Is that correct? 

Is there a way to avoid annual income tax on ordinary business income which is kept in the business account as a cash reserve for unexpected future expenses?  

Thank you in advance for your feedback. 

[Mike9241]

you pay taxes on your S-Corp W-2 wages + taxes on any remaining income reported on the k-1. it doesn't matter that you didn't distribute the remaining income. you're taxed on it. that's how an S-Corp works. you may want to consult a pro to get educated on S-Corp operations and taxation.  Also, the pro can provide guidance on the salary you're taking.  In an S corp engaged in activities where the income is largely due to the efforts/expertise of the shareholder, the IRS likes to see a substantial portion of the income going out as a salary. penalties for failure to pay an adequate salary can be substantial.