How am I taxed on Profit Distributions?
Dilemma...
I have an S-corp. For the majority of 2017, I paid myself outside of payroll ($5K was paid to me thru payroll and $20K were just 'owner withdrawals' - my acc'tant said they must be recorded as "profit distributions").
So, for 2017, I've been left with the following #s:
- S-Corp profit: $10K
- (personal) W2: $5K
- (personal) profit distribution ("earnings"?): $20K
Exactly what will I be paying income taxes on?
- $30K? (S-Corp flow-thru, W2, & profit distribution)
- or $10K (S-corp flow-thru) and I pay a different kind of tax rate on the $20K of profit distributions?