Your Tax & Business Advisor
Withdrawing Money From an S-Corp

By Raymond S. Kulzick, CPA, DBA, CDP
As published in the Pinecrest Tribune. November 8, 1999 and January 17, 2000.

 

What is the best way to get money out of my S-Corp?

S-Corporations are a very popular form of organization for small businesses because of their ability to avoid the double taxation of regular corporations. Although not for everyone, there are a number of approaches that S-Corp owners can use to reduce the tax bite from their earnings.

What is left over after all expenses are the profits of the corporation. In general, these can be distributed to shareholders when earned or later. Tax is based on when the profits are earned (as reflected on the Schedule K-1 all owners receive), not when the money is distributed. Profits must be distributed in exact relation to ownership interests and may not be distributed if not earned. There are many exceptions and special rules that could apply, so obtain qualified assistance before acting.

The popularity of the S-Corporation form of organization is expected to continue to grow as more business owners become aware of its advantages, but be alert to the many traps for the unwary.

Raymond S. Kulzick is a CPA, and technology and management consultant with offices in Pinecrest at 12177 S. Dixie Highway. If you have questions or suggestions for future columns, please contact him at 305-233-2280 or rkulzick@kulzick.com. More information is also available on the firm's Web site at http://www.kulzick.com.

This article provides information of a general nature only and should not be acted upon without seeking appropriate professional advice concerning your specific situation.

Copyright 1999 Raymond S. Kulzick. All rights reserved. 990618.

This publication provides business, financial planning, and/or tax information to our clients. All material is for general information only and should not be acted upon without seeking appropriate professional assistance. Disclaimer.

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Copyright 1999 Kulzick Associates, PA - Last modified: September 13, 2008