title>Tax Guru-Ker$tetter Letter Wizard Animation

                 

Tax Guru-Ker$tetter Letter
Sunday, October 26, 2008
 
S Corp Payments


Q:



Subject:  S corp's


Hi I just found your site and read about S vs C Corp's.  We have been an S Corp for years.  Some questions I have is:  money taken out by shareholder ( my wife and I) should that be ledgered under personal income or shareholder loans?  Is that money taxable?  My CPA says it is not taxable.  Why would I ever pay myself in wage form if this is the case.  I see as our profits get up to 65,000 or more maybe we should start a C Corp.  How so you smooth out the money in a C Corp.  I don't understand.  Maybe I should get a new CPA? 

Thanks

 

 

A:

 


If you've been operating an S corp for any period of time and your professional tax advisor hasn't explained to you all of the details of how cash distributions are treated, it does sound like s/he has dropped the ball.  That all should have been explained to you prior to your even setting up the S corp.

Likewise, if your professional tax advisor isn't aware of how to effectively utilize a C corp to smooth out your taxable income, it is time to find someone who understands this very basic tool of tax planning.

Good luck.

Kerry Kerstetter

 

 

 

 

 

 

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- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 10/26/2008 08:21:00 PM Send this post:

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