DO NOT pay taxes on Owner Distributions! - Boris Musheyev, Tax Advisor

Рет қаралды 25,517

Күн бұрын

DO NOT pay taxes on Owner Distributions!
Uncover the secrets of tax planning with our detailed guide on the tax implications of owner distributions for sole proprietorships, S-corporations, C-corporations, and partnerships.
✅ Sole Proprietors: Learn how owner draws, a form of owner distributions, can be managed to optimize your tax strategy.
✅ S-Corporations & C-Corporations: Understand the unique tax scenarios of your distributions to maximize tax savings.
✅ Partnerships: Discover how owner distributions can be used in your tax planning strategy.
Use this video to optimize your tax planning and potentially turn your owner distributions into non-taxable income!
Remember to like, subscribe, and share for more insights on tax savings, tax strategy, and effective tax planning.
#NonTaxableOwnerDistributions #BusinessTaxes #SoleProprietor #SCorporation #CCorporation #Partnership #TaxStrategy #TaxSavings"
🆓 Download FREE PDF: 7 Write Offs Every S-Corporation Business Owner MUST Know bit.ly/3DPw5UZ
☎️ Schedule your FREE Tax Advisory Session - www.TaxPlanningCall.com/
➡️If you make $10 Million or more in your business; Schedule your call here: ☎️ bit.ly/over10million
🤩 If you are looking for a really easy to use payroll software, I personally use and recommend to my clients Gusto Payroll Software - gusto.com/r/boris466
P.S. When you sign up for Gusto, you get a $100 visa gift card 🤑
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*Disclaimer This material & presentation content is for informational and educational purposes only. This material and presentation content is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal, tax, or other financial advice related to individual situations. Because each individual’s legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, you are advised to consult with your own attorney, accountant, tax preparer, and/or other advisor regarding your specific situation or your client’s specific situation. The information and all accompanying material are for your use and convenience only.

Пікірлер: 93

@borismusheyevcpa Жыл бұрын

Hey Everyone, Boris here. Check out some resources here (expand to see more): 🆓 Download FREE PDF: 7 Write Offs Every S-Corporation Business Owner MUST Know bit.ly/3DPw5UZ ☎ Schedule your FREE Tax Advisory Session - www.TaxPlanningCall.com/ Also, I put together some recommended videos. I strongly recommend every business owner to watch this. Just watching these alone will help you save money on taxes, RIGHT AWAY. And please, do your self a favor, get a Tax Advisor! ➡ Business Owner Pays Tax On S-Corpporation Distribution - kzfaq.info/get/bejne/it2mdc10vMvJnKs.html Watch this video to learn how to NOT pay taxes on your distributions from S-Corporation. ➡ Pass-Through Entity Taxation - kzfaq.info/get/bejne/atOKapWjrLjbYqc.html I urge every business owner to know about this TAX. These taxes will ACTUALLY help you pay less in taxes. ➡ Home Office Tax Deduction - kzfaq.info/get/bejne/n9OUpd2JnczTn40.html In this VIDEO, I break down how the IRS allows you to use your home office EVEN if you already have another work location. ➡ Tracey, our Tax Advisory Client, Saved over $49,000 on taxes in 2022. - kzfaq.info/get/bejne/l6eXfpdhvtfXp6c.html In this video, I break down the exact strategies we use for our clients to pay less in taxes.

@SanjayS-fj4zl 3 күн бұрын

Awesome Boris - You are great and awesome unfortunately I cannot afford you but the videos are great and Manymany thanks !!!!!!!

@marlenelybarger6669 11 ай бұрын

Very clear explanations and break downs. Thank you!

@chrismoore8754 7 ай бұрын

Answered the question I was looking for. Thanks.

@hmwngl Ай бұрын

Thanks for the info!

@holisticrelationshipcoach 5 ай бұрын

Helpful, thank you!

@timsheridan2915 10 ай бұрын

Great video as always Boris!

@paulk2085 9 ай бұрын

Thank you so much. Your explanations are clear and I learned much just from this first video. I can't wait to watch more

@divineinspiration413 11 ай бұрын

Very helpful thank you 🙏

@cm2843 8 ай бұрын

Great video Boris, please put out more content.

@elizabethmiranda2313 7 ай бұрын

wow Such great information. Thank you!!

@meredithsiss4796 5 ай бұрын

This helped me so much, thank you!

@sscoop1 7 ай бұрын

Thanks so much

@bryankelley5606 Жыл бұрын

Very informative. Thank you!

@borismusheyevcpa 11 ай бұрын

Glad it was helpful!

@Locum-ms6gd 9 ай бұрын

Thank you

@sap.kalpesh 4 ай бұрын

very educative, thank you.

@jennifermorgan-binns6544 10 ай бұрын

I find your video is very informative, and easy to understand. Thank you for sharing your knowledge with us.

@marlacocina2149 7 ай бұрын

Thank you for your info. . .

@jeffshott 4 ай бұрын

Very helpful and understandably presented

@lucys8425 4 ай бұрын

Wish we had seen your video earlier....Subscribed now.

@gabrielgranillo8885 5 ай бұрын

Surprised with such good information. Thank you.

@CryptoQueen8888 5 ай бұрын

Thanks!

@Carmaniabanania 6 ай бұрын

thanks for this video.

@shaneshaarda3100 4 ай бұрын

Thanks Boris. I own an S Corp and this video was very helpful

@user-df9mg5st6z 6 ай бұрын

very helpful, thank you so much for your tips. your 7 write offs are very helpful!!

@rupinderbrar4164 Ай бұрын

Can you clarify the Henry example. The business made 1.5 M gross revenue. 700k was the expense. The owner took 200k salary. That leaves 600k. You said owner can transfer 250k to his account and not pay tax. You said, Next year he transferred the remaining 350k to his account without tax. So the entire 600 k profit got transferred to his account (250+350 k) without any tax. So how much was the tax and where did the money come from to pay the tax on the 600k profit in the first place ?

@josephinebardot8403 6 ай бұрын

I extremely like the video, man. Very helpful and informative. Thank you very much. It is presented so well too. Great, positive work.

@tomasferko1795 6 ай бұрын

Great information.

@jesusmarrtinez3771 7 ай бұрын

Excellent information

@debbieshandmadesoapco.8627 6 ай бұрын

This answered so many questions! 👏

@borismusheyevcpa 6 ай бұрын

Happy to hear!

@JoWabbie 6 ай бұрын

I've been searching EVERYWHERE on YT for a video better explaining tax season as a Single Member sole LLC. and im so happy I found yours! finally a lot of things makes sense to me now,, thank you

@borismusheyevcpa 6 ай бұрын

Happy to hear that!

@elizabethbaldwin7307 6 ай бұрын

@JoWabbie your gratitude makes me nervous that maybe you did not understand that he spent most of the video explaining SCorp shareholder distributions. These do not apply to a single member LLC filing on a schedule C on their 1040 tax return, which it sounds like you are. Schedule C filers do not ever pay themselves payroll, and after the net profits are taxed as income they pay an additional 15.3% Self Employment tax on all of the net income. That hits a lot of Sch C filers hard, but you should know that the money goes toward paying into your social security record. Once your business net profits can support paying you a salary and the taxes that go along with that, you can make an SCorp election so that you are only paying into FICA that 15.3% on your salary and not on all net profits. SCorps have to file a separate 1120S tax return and quarterly employment returns (more paperwork, time, and expense) so the SCorp election is usually only made once your net profit gets high enough to pull salary and have a good amount left over.

@kosmoslamour 2 ай бұрын

thanks

@CryptoQueen8888 5 ай бұрын

Omg, i m ready to file my s corp taxes. Thank you so much!! I was not sure what my starting basis would be!! And thank you for advising me noy to zero out the business account.

@marciabaez6189 10 ай бұрын

love it

@MarPF 3 ай бұрын

You don't have to pay quarterly estimated taxes. Withheld taxes are not considered late so you can pay it as one lump sum at the end of the year (before the 15th January of the next year) by withholding the taxes. It of course requires you to plan ahead so there is enough withheld to pay the total taxes. I have an S-corp, so I solve it by only paying myself a salary at end of the year and withholding the taxes from that. It is a somewhat known loophole. Makes the administration a little bit easier.

@gunstin1104 7 ай бұрын

Question, My CPA says I need to take a higher W2 salary vs. taking owner's distributions because the IRS is going to get upset over not paying medicare and fica, would you agree?

@elizabethbaldwin7307 6 ай бұрын

@gunstin1104 You did not really give him enough information to go on. Look at how much you are paying yourself now. Is that what you would accept as pay to work for someone else doing everything you are doing? Is that what it would cost you to hire someone else to do your job? Can you justify that amount based on local prevailing wages? Those are the questions I would want to be comfortable with. The IRS verbiage is “reasonable compensation”. Many accountants split the profits between salary and distributions, but I think that fluctuating the salary wildly from year to year based on net profit makes more of a case that the salary is not reasonable. The IRS does say that if cash or property or the right to receive cash or property goes to the shareholder then a salary amount must be determined and that amount must be reasonable and appropriate. Shareholder distributions fit this. I think that wording is why accountants apply a formula to determine reasonable salary. I do not agree with that interpretation, but until the IRS or the court comes out with a specific formula or clearer guidance there are going to be several differing viewpoints. See the below fact sheet to help you make a determination and discuss with your CPA. FS-2008-25, August 2008

@Red-tq4vq 5 ай бұрын

Nice

@seashells523 3 ай бұрын

Hey Boris- I have worked with a tax advisor, CPA.,i do take distributions, but when they did my taxes, they always mark "$0" distributions. Why would that be especially since you don't get taxed on it?? That's always confused me.

@VictoryReverseMortgage 11 ай бұрын

Thank you for the information Boris

@borismusheyevcpa 11 ай бұрын

My pleasure!

@Sergio-hz2vc 10 ай бұрын

Learned a truck load of info. So for the 600k profit would be taxed at 15% leaving 510k which then I can distribute 250k owner dist and leave 260k in bank account for later investments without being taxed? Or am I missing something?

@julesclifford5137 10 ай бұрын

I have the same question. Can you also clarify is the Shareholder Distrabutions (S-Corp) would effect the Income Tax Bracket for that calendar year?

@elizabethbaldwin7307 6 ай бұрын

I think this video confused you more than helped. Put the 15% tax out of your head. The SCorp will file taxes, but will not pay tax on the corporate level. Instead when it files the 1120S corporate return it passes net profit/loss to the shareholders via a form called the K1 at whatever their percentage of ownership is (if you own 80% of the company, then you pay 80% of the tax on your personal tax return. It will not be taxed at the same percentage to each shareholder so you cannot just say X percentage of tax. Tax is based on your ordinary income rate and will vary based on your whole tax picture. (Someone who is married can make twice as much as someone who is single and be taxed at the same rate. ) If you are 100% owner then you will pay tax on the 200,000 the company paid you in wages and the net profit of 600,000 = 800,000 and will be taxed at your ordinary income rate. Any distributions you take out of that 600,000 have already been taxed and so you can leave it in the bank or take it as a distribution, either way it has already been taxed.

@elizabethbaldwin7307 6 ай бұрын

@@julesclifford5137shareholder distributions have no effect on your taxes because you were already taxed on 100% of the net profits on your personal tax return. Or will be taxed if you have not filed on those profits yet. Taxes are based on how much the profits were, not on how much of those profits you put in your pocket through a distribution.

@JtotheRizzo 7 ай бұрын

I have a SMLLC taxed as an S-Corp. I use this SMLLC as my holding company for all my IP, trademarks, etc. I wanted to start a new operating LLC taxed as a Partnership to save on Social Security/Medicare taxes. Is it legal (in the eyes of the IRS) to have my SMLLC/S-Corp to be one of the Partners along with me (under my personal name) in this LLC/Partnership? (Example: Partner 1 = SMLLC/S-Corp and Partner 2 = Me). I would be the only "human" in this operating LLC/Partnership. Appreciate your thoughts on this.

@KeaKou Ай бұрын

Isnt an S corp a pass through entitty? I thought the meaning of that is any profits made in the S corp is passed onto the shareholder... in this case if i am the only shareholding i get 600k profit to me... wouldnt that be taxed?

@mike2959 4 ай бұрын

The only thing that needs clarified. Is a S Corp is not a “entity”. You can’t go form a S Corp. A S Corp is a tax election that an entity can make.

@CryptoQueen8888 5 ай бұрын

How do we show owners distributions to the IRS??

@DougBursonCPA 5 ай бұрын

If. you look on Page 3 of the 1120s you will find line 16C Enter it there and then it will also go on Page 5 at the bottom in the M2 section line 7. If you are using software from there it should automatically flow to the k-1's. Hope that helps.

@CryptoQueen8888 5 ай бұрын

@@DougBursonCPAThank you!!

@CryptoQueen8888 5 ай бұрын

I withdrew too much of an owner's distribution. I was not aware 3rd party loans were not classified as owner' s contribution. How can 8 avoid capital gains tax

@CryptoQueen8888 5 ай бұрын

I also use quickbooks, am I able to enter owner's distribution as a journal entry. Thank you in advance.

@MigdaliaCampos Жыл бұрын

@borismusheyevcpa question S-corp shareholder would pay no taxes even if he/she withdraw more than initial investment/capital. I mean if shareholder started business with $15,000 of her/his money. Once company has profit he/she wants to withdraw $30,000 and continue to withdraw every year the same amount. Only wants a minimum of wages to be incompliance with S-corp regulations.

@elizabethbaldwin7307 6 ай бұрын

Their basis would change from 15,000 based on the net profit, contributions, distributions, and liability of the company. It would not stay at 15,000. They cannot take more than their basis. They pay tax each year on the net income. I know he said no taxes, but that is because the income was already taxed, so distributions based off of that net income are not taxed.

@live4therisk220 9 ай бұрын

When taking money out of your bank account as a distribution and putting in your bank account. Do you have to pay taxes on that distribution on your personal income tax return? Isnt it considered income?

@DaniellaCotreau 9 ай бұрын

I had the same question.

@robwithrbk 8 ай бұрын

What matters is what's in your tax return(s)...not so much the flow of the money. You might take a distribution in 10/2023 against cash that's been the corp checking since 2021 and already accounted for in some other tax year. Your books and how you file is what matters.

@elizabethbaldwin7307 6 ай бұрын

You do not need to pay tax on the distribution because it is money you were already taxed on when you reported the K1 earnings on your tax return. You just cannot withdraw distributions in excess of your basis.

@s.l.practitioner3604 9 күн бұрын

My fellow bukharian

@CryptoQueen8888 5 ай бұрын

Hey Boris, are S Corp loans to shareholder for the tax year need to be repaid back within that tax year??

@borismusheyevcpa 5 ай бұрын

@CryptoQueen8888 5 ай бұрын

@borismusheyevcpa I am filing my 2021 taxes selected as a S corp in which I am 100 percent shareholder. I took out excess distribution. How do i avoid excess distribution capital gains tax.

@shpop1 7 ай бұрын

How much tax he pay on 600k if he draw entire amount vs choose to keep the entire 600k in business. I think it is almost the same.. can somrone do the math..

@tiffanyipsen9812 11 ай бұрын

Here is a question. Can an S-corp be a single owner or does it have to have multiple share holders?

@thepianist7084 11 ай бұрын

An S-Corp can be a single owner

@julesclifford5137 10 ай бұрын

@@thepianist7084 Single owner, 100% ownership

@elizabethbaldwin7307 6 ай бұрын

@tiffanyipsen9812 Single owner SCorps also have an amazing tool that no one else has. If you do not have any employees (aside from yourself and a spouse) you can sock a lot more money away for retirement than the government allows for any other person. This is done through a retirement plan called a Solo401k.

@thefitnesslabs Ай бұрын

Saying that you can pull the remaining $350,000 the following year is misleading because there will not be $350,000 left the following year, as a lot of that $350,000 will be gone because it is used to pay taxes on the $600,000 profit, which will likely be at least $100,000

@ProXPowerWashing 8 ай бұрын

So a distribution is not tax deductible and won’t lower net income?

@georgegillespie9213 13 күн бұрын

Yes it is

@blew3749 Жыл бұрын

My understanding is that the distribution needs to be taxed. How is it legal to not tax the distribution? Please explain.

@borismusheyevcpa 11 ай бұрын

Check out this video: kzfaq.info/get/bejne/it2mdc10vMvJnKs.html

@richardbryanesq 8 ай бұрын

The shareholders of an S corp pay income tax on the corporation's earnings, not the amounts which they take out in cash. This is why S corps, like partnerships, are sometimes called "pass through entities." The S corporation doesn't pay tax on its earnings; the shareholders report the corp's income on their personal tax returns, and pay personal income tax on the S corp earnings. This is completely separate from what the shareholders take out of the corporation's bank account as distributions. Sometimes a difficult concept, but that's the whole point of S corporations.

@elizabethbaldwin7307 6 ай бұрын

⁠⁠@@richardbryanesq please edit. You misspoke. There is an indeed an SCorp tax return. It is form 1120S. SCorps file a tax return, generate a K1 for each shareholder, and the shareholders pay the tax. I think you meant to say that SCorps do not pay income tax, their shareholders pay it instead.

@richardbryanesq 6 ай бұрын

Thank you! @@elizabethbaldwin7307

@Jay-tu4rs 7 ай бұрын

If your paying taxes on the net then your distribution isn't tax free its just money that you've already paid taxes on??

@elizabethbaldwin7307 6 ай бұрын

You are correct. I think he was just clarifying that distributions themselves are not taxed. The profits were already taxed so you can take distributions on whatever profit is left as long as distributions do not exceed your basis.

@tonysnow2015 6 ай бұрын

@elizabethbaldwin7307 If you own 100% of the business then you can take any size distribution on the profits, is that correct?

@georgegillespie9213 13 күн бұрын

Thats a bit misleading. The owner would still pay tax on the 250,000 but the company wouldn't

@Bachimka1981 9 ай бұрын

Can you just do my taxes, I’ll pay you😂… my head hurts! Id rather make money & you do my taxes🤷🏻‍♀️

@borismusheyevcpa 9 ай бұрын

lol sure @Bachimka1981 you can schedule your call at www.TaxPlanningCall.com

@CryptoQueen8888 5 ай бұрын

@@borismusheyevcpa Boris, I know my starting basis, I have calculated distributions based on my business account statements, took out business loans from 3rd parties, now are these cash I distributed from my business loans to myself called distributions??

@mitzisnails9209 7 ай бұрын

Wow ill be firing my accountant. lol

@zoyavijay 9 ай бұрын

Tries to be funny but ends up falling flat.. Two breaks in a 13 minute video...

@d3fr4g17 8 ай бұрын

Guy makes video with good information, promotes himself and his business twice...for 10 seconds. C'mon, this is how he provides for himself and his family. I don't see anything wrong with spiking his hustle and chasing the American dream!

@zoyavijay 8 ай бұрын

@@d3fr4g17 ok you're entitled to your own opinion. He didn't impress me..