I am the sole owner of my s Corp. I want to roll the net income back into the business. I do pay myself a salary. How can I show on the K-1 that I didn’t take the profits

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February 24, 2023
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TurboTax Online

Best answer by Anonymous_

How can I show on the K-1 that I didn’t take the profits?

You have to report the ordinary income from Schedule K-1 (1120-S) regardless of whether you took a distribution and regardless of what you do with the profits.

In other words, you are taxed on the net profit of the corporation despite the fact that you "roll the net income back into the business".

Anonymous_Answer

Employee

How can I show on the K-1 that I didn’t take the profits?

You have to report the ordinary income from Schedule K-1 (1120-S) regardless of whether you took a distribution and regardless of what you do with the profits.

In other words, you are taxed on the net profit of the corporation despite the fact that you "roll the net income back into the business".

priorityrecordsAuthor

Thank you!

Critter-3

If you do NOT pay yourself a reasonable wage as a sole owner of an S-Corp then you leave yourself wide open for an audit. What you should be doing is paying yourself a wage and have it reported on a W-2 ( filing all the proper payroll tax reports timely) and then make a "loan" back to the business for the retained earnings. Seek help if you are not understanding the bookkeeping behind the theories.