Thank you for this video. I was having a heck of a time understanding the downsides to just using distributions for everything. I knew it wouldn't be as easy as "I can just evade paying taxes to the IRS", but your video really helped flesh out what I need to do come tax season.
With my trucking company I started a c corp . Im an employee under my c Corp so I have a salary that takes taxes out on me as an individual at the end of the year I would get a W2. to file my taxes under my seat c corp. Still a little confused about making distributions to myself do a video about that please. I think you going to distribution in this video but the difference is I have a c corp
Great video and I really appreciate it however I did get a little confused at the end when you were saying that the 40,000 goes on the 1040 so does that mean now it's being taxed because you're putting that 60,000 from the W2 along with the 40,000 from the K-1 on the 1040 so does that mean that the 40000 is being taxed thank you
Thank you for the explaination - very helpful. How or what program is recommended to use to actually pay yourself and file with the IRS? I was looking for an email for you but cannot find one.
Hey Brandon...I love your videos they are very informative. We are single LLC S corp just starting out with a leased truck. My question is what do most use for payroll software? QuickBooks payroll?
What about profits that aren't distributed, and remain within the company accounts for growth? Any taxes? Or do all profits have to be distributed every year?
Question, i got all of the white board. Great information. Question, after John D. K1 added with W2 = 100000.00 . Is john D paying taxes on 60000.00 or 100000.00 reported income. Thanks
Please tell me how I take disbursements though. When do I pay myself that $40,000? Is it I paid alongside my W2 pay or do I wait till the year in and pay myself the whole 40,000 at once?
How is the $40,000 distribution taxed? My understanding is that the shareholder is not subject to self-employment tax on the $40k, but there would be capital gains(?) tax.
Is it smart to pay all of your bills with a company credit card to get points, air miles, etc.? Can you make a video on it possibly of some good cards?
I have an s corp and this is my first year being an s corp but been sole the past few years, based on your example, do I get taxed on the 100k on my 1040? And on k-1 do I pay that tax on that too ?
Here's what's happening in this example... You are paying taxes on the 100k on your 1040. You receive a W-2 from the company for 60k. You report that income on your 1040. You receive a K-1 from the company for 40k. You report that income on the 1040 as well.
If John took a distribution of 20k instead of 40k, is John paying any additional taxes on his personal tax return for the 20k distribution ? Is he also paying additional taxes on the business side for the remaining 20k? Lastly, is this formula the same if the LLC had two owners or if the company was an actual S corp and not an LLC?
In this example, John is paying income taxes on the $40,000 on his personal return (as business profits) regardless of how much of it he takes as a distribution. This example is what it would looks like when an LLC elects to be taxed as an S Corporation. It would be different if there were two owners.
@@brandonlindsaycpa how would it be different for 2 members? As this would apply to our LLC, we have fully started on the road and would like to start out payroll as S-Corp with 2 members only? Thanks
In this example, John is paying income taxes on the $40,000 on his personal return (as business profits) regardless of how much of it he takes as a distribution. So John would probably take some of the $40,000 and use it for taxes.
So for a trucking business would I be able to use the distribution money for maintenance and breakdowns or would I have to use money coming out of my payroll check? If I am able to use the distribution money for repairs and maintenance then would I still have to save the receipts and file those expenses during tax time? I am doing S Corp 50/50 with my father how does the payroll work if we are only going to be using one truck for now. I will be the full-time driver and he will still continue his personal job, does my father still have to be on the payroll or does he just receive distributions tax free?
Okay so but I have to add also my schedule c on my 1040 right? Plus my k-1 . In other words my 1040 will be mu w2 , my business report schedule c and k-1. Right???
Here's what happened in this example... There is no Schedule C. There is a W-2 from the S Corp and then there is a K-1 from the S Corp which reports the business profit. Both are included on the 1040.
This is the other video I mentioned. The one I made about paying yourself as an owner-operator with an LLC: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-UZ0bY4i7-RI.html
Great video! so you will pay federal and state tax on the $40,000 from the company, And the $60,000 you paid yourself. But you only pay the pay role tax 15.3% on the 60,000 you paid yourself. the $40,000 is not touched by the payroll tax. Nice!
