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BluebirdBookkeeping
October 3, 2022
Question

How to set up a distribtution account for an SCorp in QB Desktop

  • October 3, 2022
  • 1 reply
  • 0 views

Please help- My client took a large distribution to pay her business taxes and I'm not sure if it should be set up as a draw or distribution. She does not want it to be paid back. She initiated this through a wire transfer directly to her personal account. How do i set this up in the chart of accounts? Thank you in advance for your help and instructions. 

1 reply

Rainflurry
Rainflurry
October 3, 2022

@BluebirdBookkeeping 

 

Is this is a single-shareholder S-corp?  If so, create an equity account called '2022 - Distributions' and assign that to the payment.  It's nice to have a new equity distribution account for each tax year - make the previous year inactive after you close it to retained earnings at year-end.  S-corps make distributions, sole proprietors and partners take draws.

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