Taking Money Out of an S-Corp: Draws vs. Salary

Taking Money Out of an S-Corp: Draws vs. Salary

https://youtu.be/VSnRp2qnXkM When you do business in your own name as a sole proprietorship, there isn’t really such a thing as a “salary” or a “distribution.” Clients and customers pay you, you pay taxes, done and done. As long as you keep your personal and business expenses separate, ideally using separate bank accounts, you’re good. As an S-Corporation, suddenly you have a choice to make every time money leaves the company’s “hands” and gets into yours: is it a draw or a salary? Draws Owner draws: Are usually either for estimated taxes, due to a specific event, or from business growth…
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How to Pay Estimated Taxes as an S-Corp

How to Pay Estimated Taxes as an S-Corp

https://youtu.be/sGqZ5fJEv94 When you earn money as an employee, you don’t have to make estimated tax payments throughout the year. Or, rather, the estimated tax payments are made automatically by your employer through the withholding process, and these payments that were made on your behalf all year are conveniently reported to you on your W-2. But as an S-Corporation business holder, none of this is automatically done for you. The Process Unfortunately, the annual schedule for estimated tax payments is very strange: Q1 estimated taxes are due by April 15th. So far so good. April and May estimated taxes are due…
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How Flow-Through Entities Work

How Flow-Through Entities Work

https://youtu.be/bzYgb3y3NUY If you’ve been keeping up on our S-Corp series, you’ve probably aware of a few important facts about S-Corporations: They must file an annual tax return. They do not pay taxes. So why do S-Corporations have to file a tax return if they don’t ever pay taxes? Divvying Up the Treasure When thinking about S-Corporation tax return, let’s use a pirate analogy for fun. Your ship’s pay is similar to a corporation. All of the workers on your ship get their regular wage, whether it’s salary or hourly. You and your co-captain take a wage and then get to…
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