How S Corp Taxes Work

Рет қаралды 59,794

2 жыл бұрын

In this video I discuss how S Corp taxes work. How the profit from an S Corp flows through to the owners? What is a "pass-through" entity or "flow-through" entity?
🔗Useful Links:
🌐 Website: navimarajcpa.com/
📋 Enroll In My Course - Small Business Taxes: From Knowing Nothing to Savings Thousands: navimarajcpa.com/learn/
📁 Setup your LLC or Corporation for FREE:
FileYourBusiness.com: www.fileyourbusiness.com/
Inc Authority: bit.ly/incauthoritycoupon
IncFile: bit.ly/incfilecoupon
ZenBusiness: bit.ly/zenbusinesscoupon
If you learned something from this video, please like and subscribe and follow me on my various social media handles below. If you would like to contact me with a specific question, please visit my website or leave me a comment.
Website: www.navimarajcpa.com
Email: navi@navimarajcpa.com
Instagram: / navimarajcpa
LinkedIn: / navimarajcpa
Twitter: / navimarajcpa
Facebook: / navi-maraj-cpa-pllc-10...
🎬 My Video & Audio Gear List 🎬
Sony ZV-1: amzn.to/3i7SYcm
SanDisk 128GB Extreme PRO SDXC: amzn.to/3c6fvm6
SanDisk 256GB Extreme PRO SDXC: amzn.to/3wORFTs
Elgato Cam Link 4k: amzn.to/3p8EKJq
Amazon Basics Flexible and Durable Micro HDMI to HDMI Cable: amzn.to/3yP4dfF
Anker 4-Port USB 3.0 Hub: amzn.to/3yTjKev
Rode VideoMicro Compact On-Camera Microphone with Rycote Lyre Shock Mount: amzn.to/2Tn0iX0
Gonine DK-X1 DC Coupler AC-LS5 AC Power Adapter Kit Replacement for NP-BX1 Dummy Battery: amzn.to/3vEbZHf
SMALLRIG Cool Ballhead Arm Super Clamp: amzn.to/2R99jCt
SMALLRIG Camera Cage for Sony ZV1 Camera: amzn.to/3uASs9m
Camtasia screen capture and video editing software: www.techsmith.com/video-edito...
This video was created for informational purposes and it is not to be construed as legal and tax advice specific to your unique situation. Some of the links above are affiliate links which means that if you purchase a product or service with the provided link, I may receive a commission with no additional cost to you.
© Navi Maraj CPA PLLC. All rights reserved.
#HowTaxesWork #SCorpTaxes #LearnTaxes

Пікірлер: 212

@NaviMarajCPA 5 ай бұрын

💰 Ready to save THOUSANDS in taxes? Enroll in my course here 👉 navimarajcpa.teachable.com/p/smallbusinesstaxessale

@ericalouie4548 26 күн бұрын

the way you walked through from the S Corp tax return to 1040 makes everything clear. your video is very helpful. thanks so much!

@XDVansKidXD Жыл бұрын

I literally cannot thank you enough on how easy you made this to understand. I’ve watched dozens of videos about s corps and I’m so grateful you did this walkthrough here. I wish things like tax returns were taught in school but I’m grateful for platforms that allow creators like you to educate the masses. Thank you sir 🙏🏽

@luisasipple9315 Жыл бұрын

Thank you very much. This was Avery helpful. This year has been so stressful and I was very concerned about my taxes. This clarifies the cobwebs

@Lissa0105 Жыл бұрын

Great video. Thanks for walking through the forms and simplifying it.

@CarlosRamos-ru6fd Жыл бұрын

Fantastic video! Thank you very much for explaining a complex topic in a simple way.

@Otherthan338 Жыл бұрын

As a new loan originator, this was extremely helpful when understanding what docs are needed and what they mean to qualify clients. Thank you!!

@dustinnitz9349 Жыл бұрын

You explained that so simply!!! Thank you! I'm over here doing Turbo Tax and becoming paralyzed about ALL the questions and ALL the details. You just laid it out very simply what the lines are for and how they should fall into the personal return. Thank you!

@jasonk305 Жыл бұрын

Such a helpful video! I’m a new EA and am gonna watch all ur videos.

@brandonk6370 2 жыл бұрын

Incredibly helpful video, thank you

@lakland8603 5 ай бұрын

Great stuff, Navi! Thank you so much for sharing this info. It's so important to see "both sides of the equation" and see how the numbers flow from S Corp to personal returns.

@vickychavez7002 Жыл бұрын

You are by far the best content creator I have come across.

@ericramsay3983 Жыл бұрын

Love it man. So hard to find videos that aren't going through this stuff in a general and jargon ridden manner AS THOUGH THE VIEWER ALREADY KNOWS THE TECHNICAL DETIALS. Very annoying. Thanks

@NaviMarajCPA Жыл бұрын

Thanks Eric! I try to explain things and terms as if it is the first time you ever heard of it. Appreciate the feedback.

@RyanChann 6 ай бұрын

Thank you so much for demystifying such a daunting system! So well explained! Earned a subscriber,

@wctw9919 Жыл бұрын

Thanks for the detailed walking through showing us exactly what it is on the tax form. I was so lost and overwhelmed

@NaviMarajCPA Жыл бұрын

Glad you found it helpful and are no longer lost!

@murraymackenzie4313 11 ай бұрын

I appreciate this video. Using the actual IRS Forms makes it 'real', and not some wishy-washy whiteboard exercise in most videos. Thank you so much.

@OfficerJohn31 11 ай бұрын

Very informative and easy to understand...thank you for this!

@adama2569 Жыл бұрын

Exactly what I was looking for. Thanks!

@NaviMarajCPA Жыл бұрын

You’re welcome! 👍🏼

@magicthaienglish 10 ай бұрын

Thank you so much. Very informative and to the point.

@jacgamache Жыл бұрын

This is amazing! Thank you, Navi

@dianabarris3145 Жыл бұрын

Thank you so much, this was so helpful.

@igordasilva7073 6 ай бұрын

Very insightful. Thank you!

@blakejones4087 Жыл бұрын

Great video !! No selling online service good information precise and to the point !! 10/10 highly recommended!!

@NaviMarajCPA Жыл бұрын

Thanks for the feedback! Appreciate it.

@VictoryReverseMortgage Ай бұрын

Thank you ! It’s amazing to me that there’s so much content not produced by professionals who are licensed and giving financial legal advice that could be completely damaging and cause liability! Keep up the good work

@keona7495 Жыл бұрын

Thank you for this explanation. As a new business owner taxes were very confusing .

@MANONGERARDO Жыл бұрын

WOW I'll say it in spanish and hopw you can transelate it. Mi amigo de verdad que le estoy muy agradecido po este video que es de los pocos videos que e visto que estan muy bien explicados, ya lo sigo y la verdad solo espero ver otros videos igual a este. Thank you very much!

@mdca8773 Жыл бұрын

Navi... just found your channel and the information is really great... I've watched others on the same themes and yours is the best so, hopefully that is encouraging and motivates you to keep up the good work.

@NaviMarajCPA Жыл бұрын

Thank you so much for the feedback. With this comment alone, I should have enough motivation to produce a few more 😉.

@seangoff9578 Жыл бұрын

Thank you. Well explained and easy to understand.

@NaviMarajCPA Жыл бұрын

Glad it was helpful!

@anaswarraich6231 Жыл бұрын

Exactly what i wanted to know. thankyou for very good content.

@TwoCommaPauper 2 жыл бұрын

Wow, your video is so thorough. Thank you for walking me through the actual 1120s + the 1040 form. Probably because of our similar background in the financial services industry, everything you said clicked for me. Greatly appreciate you sharing this on KZfaq!!!

@NaviMarajCPA 2 жыл бұрын

You're welcome! Thanks for the feedback. Looking to start your business? What caused you to watch the video?

@papasmurfao1 Жыл бұрын

Helpful example and detail. Thank you.

@NaviMarajCPA Жыл бұрын

That's great. Glad you it was helpful for you!

@midwestlivin7029 11 ай бұрын

Best video I’ve seen on this

@AI4uUzOvhvOFnEGSAOoe2Q 5 ай бұрын

This is the best channel I have found. Thank you so much for sharing your knowledge! By the way, form-1120s comes with a bunch of other forms like schedule-B, K, L, M1, M2, when do these need to be filled?

@mytubeforme Жыл бұрын

amazing info! thank you so much.

@sammyofwesttexas6925 Жыл бұрын

Awesome you broke it down perfectly.

@NaviMarajCPA Жыл бұрын

Thanks for the feedback! 👍🏼

@JeanClaudeZidorAETJInc Жыл бұрын

No better way to learn about S-corp. Thank you

@babakhanyile8854 Жыл бұрын

Fantastic job understood you 💯👏🏾🙌🏾👍🏾

@NaviMarajCPA Жыл бұрын

Thanks Baba - glad you understand it now!

@shaileshwaniya2581 Жыл бұрын

Really good explanation, appreciated🙏

@NaviMarajCPA Жыл бұрын

Thank you! 👍🏼

@Biztalkcontrolcenter 5 ай бұрын

This video is priceless man

@dorotakizewski4782 8 ай бұрын

Extremely great video

@bmjmanagementllc 10 ай бұрын

New to the channel awesome info!

@fin5fin Жыл бұрын

Hi Navi - great explanation - it would be great to see a comparison tax example of a non-S Corp to understand the tax savings or not

@NaviMarajCPA Жыл бұрын

I've got videos related to this. I think its called When does an S Corp make financial sense. Check out that video.

@Lizzyb1 Жыл бұрын

This was very helpful thank you

@NaviMarajCPA Жыл бұрын

You're welcome. Glad you found it helpful!

@jaygonzalez8315 Жыл бұрын

Hi! Great video! looking for some info on taxes for my small trucking company (Owner operator of 1 truck) and ran into your video. Loved it because of your ability to educate... I was able to understand in less than 20 minutes! 👍💪💯... I have LLC and looking to see if S-corp or C-corp would benefit me so I can stay in business during hard times and be able to grow the business with pre-tax dollars... Thanks

@NaviMarajCPA Жыл бұрын

Thanks so much for the feedback, Jay! This is a general statement, and not specific tax advice, but most of the time, the S Corp is more appropriate than a C Corp but you really need to consult with someone (doesn't have to be me) to ensure it is appropriate for you.

@jaygonzalez8315 Жыл бұрын

@@NaviMarajCPA Hi and thank you for your reply!🙏 I appreciate you taking the time 👍💪💯

@WQQKIE Жыл бұрын

Great explanation

@NaviMarajCPA Жыл бұрын

Thank you for the feedback!

@CryptoGod79 2 ай бұрын

Great video bro❤❤❤

@jacquelinedelaluz9217 2 жыл бұрын

Hi Navi, I appreciate your videos since it is helping me have a better understanding of difference entities. I was wondering how does the pass through work for a MM LLC if there is no payroll? and not a considered an LLL/s corp? Just going to start my business which i dont see it profiting until the end of this year or start of next year.

@DO_YOUKNOWDAEWAE Жыл бұрын

Thank you, this video is very informational, following…..

@NaviMarajCPA Жыл бұрын

You're welcome Christine!

@RVI123 5 ай бұрын

Neat presentation.

@aoleusa 2 жыл бұрын

Great video, Navi! What do I do if we became an LLC 4 years ago and never elected S Corp status? Should we start a new LLC?

@CIRIHawaiiLLC 3 ай бұрын

Great info Navi. Really helps clear up the confusion on this process! Question regarding the form 941 and the 1040. As an SMLLC S-corp, would I still file 941 for the Information but pay the payroll taxes via my 1040 every quarter? I've been exploring the EFTPS platform but I am unable to submit the 941 form without paying the taxes I've written down as withheld. This is where I am getting confused between the information purposes of filing form 941 and actually paying the withheld payroll and federal taxes. I just e-filed my 1120s and am getting back a return for the same amount I've been paying every quarter via the 941 form. I know late fees are coming for not paying via my 1040 every quarter in 2023 but want to understand this for a better 2024 tax season. Thank you Navi.

@ammaryameenmba4106 3 ай бұрын

Well said!

@ElJerry Жыл бұрын

One of the best vídeos.

@NaviMarajCPA Жыл бұрын

Thanks so much @ElJerry!

@ElJerry Жыл бұрын

@@NaviMarajCPA do you have a videos about LLC. ? can you send me the link thanks

@andrewcowan10 2 жыл бұрын

Hi Navi, great video. I think you should clarify this is informational for Federal purposes only though. S Corps still get taxed in most states, have to pay estimates to the state, etc

@NaviMarajCPA 2 жыл бұрын

Hi Andrew....you're right this is the case for federal. I could be mistaken but, in my experience, not many states tax S Corps too heavily.....perhaps NYC, TN, NH are the worst offenders. Anything specifically you had in mind that I may not be aware of?

@user-py7wp6nw9h 6 ай бұрын

love your videos. Thank you thank you! I am no longer in the dark

@Christ_is_King951 5 ай бұрын

very informative

@humand0gz Жыл бұрын

got a sub from me. how is this not more popular

@NaviMarajCPA Жыл бұрын

Thanks for the sub! Feel free to "share" it as well. Spread the word - appreciate you.

@Roadsiderevelationsnyc Жыл бұрын

Navi thank you. You have throughly explained everything in detail. Can i hire you in the future as my CPA?

@juliachu3775 Жыл бұрын

Hi Navi, thank you for explaining ! I have a question: I live in California, if i form an s corp, would my s corp's state income flow through to my state personal tax return? thank you in advance.

@jonathantruong1170 8 ай бұрын

Amazing Explanation. Thank you! Question you mention Qualify and Standard Deduction for form 1040. How do we find out what this amount should be and do all s-corp have deduction for these two feilds?

@conquerunderstanding7517 Жыл бұрын

Great information, thank you! No mention of quarterly filing deadline or is it only once per year?

@NaviMarajCPA Жыл бұрын

The 1120S is filed once per year. Quarterly tax returns relate to payroll tax reports such as Form 941 (and your state's equivalent of the Federal Form 941).

@ExquisiteBossin 8 ай бұрын

Great Video Navi! I just have a quick question. Is one able to also take deductions from a Sch. C on form 1040 personal tax return that is separate from deductions received through the K1 pass through.

@dandeejay1 Жыл бұрын

Very helpful

@brodyllc Жыл бұрын

Clear and concise, Thank you sir.

@NaviMarajCPA Жыл бұрын

You are welcome! Thanks for the feedback.

@leeoday9076 Жыл бұрын

Great content just subscribed to your channel. So are you saying S Corp act as a pass through to the individual or to an LLC? You have the entity but you're working on a 1040. Or is there another video explaining? TY

@NaviMarajCPA Жыл бұрын

Can you rephrase your question? The S corp is a pass through entity and the profits pass through to the individuals that are shareholders. In the video I show both the 1120s and 1040 tax returns. Hope that helps.

@user-te7iu1mo9p Жыл бұрын

Also do you have a video on form 1120-S Schedule K-1?

@mikebrownsteadbrownsteadre8037 2 жыл бұрын

Excellent video, I need to schedule a consultation with you

@thadiesel7655 Жыл бұрын

Very helpful. Thank you. Question. What If the business operated at a loss. Trucking company. This is my first year and if I write off the full amount of the truck, I'll be at a loss. Should I depreciate the equipment?

@zwallace8718 Жыл бұрын

very helpful

@janetf9888 Жыл бұрын

Excellent… !

@NaviMarajCPA Жыл бұрын

Many thanks!

@babowantedgaming Жыл бұрын

bro you explain it like a 5 years old. Your helping alot man, i really appericate these videos. Sub + Like!!

@joseperez-ih7hi Жыл бұрын

Great Video, I am just graduating with an accounting degree and still have not learned tax prep. Do you offer a tax prep course for people who want to take on clients for themselves? I have a basis of knowledge but no real life experience to get me through intermediate or complex returns.

@Kristy-vw2mz Жыл бұрын

After you make the 1120S is there a form that would show how much you have to put on the 1040 or do we just put the amount from line 21? Isn't there something called a K-1 or is that something completely different.

@CapricomLLC 2 ай бұрын

Greta video, thank you. Is the owner of the S-Corp required to take the $60,000 distribution from ABC LLC or can that stay with the business for the following tax year?

@valerienewton6581 4 ай бұрын

Excellent video, thank you! I have started an S Corp. Using your example in the video: If my LLC paid me an income of the $40,000 but the "ordinary business oncome" being $60,000 and S Corps odon't pay income tax (and is a pass through tax reported on my 1040 from my W-2) what am I allowed to do (legally) with the $60,000 ordinary business income? Thank you

@CapricomLLC 2 ай бұрын

Great video. Is the owner required to take the $60,000 distribution from ABC LLC as a dividend, or can that money stay with the LLC for the following tax year?

@llerretjazelle 6 ай бұрын

so good

@sonyablack2015 9 ай бұрын

This used to be one of my most watched channels... sadly, it's been a while since i visited it has been a very rough year... i am experiencing one of the toughest phases of my life... Lost a fortune lnvesting in emerging companies. Hopeful, for a turnaround.

@user-te7iu1mo9p Жыл бұрын

I'm lost at the employer taxes. Can you make a video breaking down the forms and type of taxes for the employer

@jonathantruong1170 8 ай бұрын

Do you have a video on how to change my partnership to a s-crop? It is currently running and I am afraid to switch and miss some forms, docs, and permits that will result in this switch

@jessipizza Жыл бұрын

Very helpful video, thanks! If the owner were to contribute $10,000 into a solo 401k (25% of the $40,000), that would decrease what the individual would owe, correct?

@dmcrabby Жыл бұрын

if you don't take a distribution, does the K-1 still pass thru the ordinary business income/loss to the personal return? so they pay taxes on it whether or not they take it from their business account?

@dharmacres 2 жыл бұрын

I searched your videos, but was wondering if you had any resources about married partners filing jointly when one or both are a single owner LLCs. Is it better to file separately or still jointly and when it would benefit to file separate.

@IIIGoddessIII 2 жыл бұрын

A married couple is considered one single member for LLC. You would file MFJ return. You can elect different status on your 1040 if you don’t want to be responsible for your spouse’s taxes whatever the reason that would be. It is usually not beneficial to file married filing separate as you would lose certain credits and pay more in tax.

@mikecochran1759 Жыл бұрын

Like for instance a question on line 21 of the 1120-s that is the pass through amount but who does it get passed to? Just the ceo? or does it somehow get chopped up and given to the other officers? How does it get chopped up if it does?

@tonymedrano40able Жыл бұрын

Great video I will subscribe. What happens if you decide to take money out , withdraw money from the profit (the 60k) ? Do you have to pay taxes from that? Thank you for the lesson

@Diesel4242 Жыл бұрын

That’s what I’m wanting to know

@homesteadingdiy4100 Жыл бұрын

Thumbs up for showing this on actual tax forms! Very helpful for sure but I still haven't been able to find a concrete answer on when you have to take distributions...even from my CPA. I see many descriptions of S-corp distributions tax-free up to your stock basis and then after that being taxed as long-term capital gains. How do you actually do this? My CPA describes something complete different, my initial investment is a sunken cost (not taken back through a tax-free distribution) and my distributions will be taxed as regular income. Anybody know why the discrepancy? I was planning on living off my regular income and keeping the capital in my S-corp and only be taxed when it "passes-through" to me but seems like it will be taxed whether it passes through or not.

@vasilestana9754 Жыл бұрын

I wish I could find that out too, I wasn't planning on taking distribution until I'll retire because my SocialSecurity will be very small. Please let us know here if you find out. Thanks

@homesteadingdiy4100 Жыл бұрын

@@vasilestana9754 From my understanding E&P that accumulates (i.e. not distributed in the short-term) as accumulated adjusted accounts (AAA). Distributions from AAA can be taxed as a long-term capital gain and not as earn income. There are more specifics on how that works but I believe that is the basics of what is possible.

@chipsun2504 Жыл бұрын

Thanks you

@NaviMarajCPA Жыл бұрын

You're welcome!

@dfailsthemost Жыл бұрын

That 2,347 is not included in that $5,000 taxes and licenses amount, correct? Trying to make sure I'm using the right figure for QBI.

@user-md4bp8jq1r 10 ай бұрын

Hi Navi! How would the owner get the $60K that the K1 was for? Since they are paying income tax on it how did the S-Corp actually send it to them?

@whopkins85 2 жыл бұрын

Thanks Navi - really appreciate your vids. If I'm electing for sole proprietorship this year (for tax reasons) but expect an S-Corp will be optimal next year, is that an easy switch?

@NaviMarajCPA 2 жыл бұрын

Yes, you'll just file Form 2553 to have your single-member LLC taxed as an S Corporation. I assume you formed an LLC, is that right?

@whopkins85 2 жыл бұрын

@@NaviMarajCPA Thanks! Yes, formed an LLC (but haven’t yet elected my tax status).

@marketingurbusiness Жыл бұрын

Great informational video. As the business owner, I'm paying myself with 1099. Do I file a Schedule C first so then it generates to 1040 form?

@NaviMarajCPA Жыл бұрын

I don't have enough information to answer your question. A business owner should never pay themselves with a 1099. I did post a video about how to pay yourself if you didn't run payroll that mentions issuing yourself a 1099 but that would be a one-time exception.

@sha-nelletolentino4920 Жыл бұрын

Great video however is the return missing self employment tax on the ordinary business income?

@NaviMarajCPA Жыл бұрын

Hi there! You may need to restate your question but there is no self employment tax (FICA) taxes assessed on the business income. FICA is only for the reasonable compensation paid to the owner (shareholder). I entered $5,000 on line 12 of the 1120s to represent employer portion of the payroll taxes. I just made up the number but that’s where it goes.

@prajnair8714 2 жыл бұрын

What if the owner-employee decided to start a SeP account for the balance 10k? They’d owe nothing in taxes correct?

@lnkinc6823 2 ай бұрын

So do you put the flow through income on a K1

@SuperPeggy23 3 ай бұрын

Hi Maraj, what if the officer compensation, his salary not W2 and S-Corp issuing 1099 to the owner. What is the process for his wages?

@SimonSozzi7258 Жыл бұрын

They file an informational federal return (Form 1120S), but no income tax is paid at the corporate level. The profits/losses of the business are instead “passed-through” to the business and reported on the owners' personal tax returns. You still have to pay Taxes you just don't have to Pay Corporate Taxes. But you do have to take a reasonable salary and the dividends/Profits are only taxed as Income with no FICA payroll Tax.

@janakarajapakshe Жыл бұрын

hello - if i am a sole entity creates a scorp and get a salary from it , and there's funds left in the s corp account what do i do with that funds? , how do i get those funds for other investments?

@kaywawak2416 5 ай бұрын

So to extend the scenario to actually paying the taxes.. How does the owner pay the 10 grand from the companies pockets without it looking like a distribution for the next tax year? This is assuming that business finances and personal are separated, as they should be. And distributions, outside of classified wage income, is still considered taxable income for the individual. Can the tax payments be made directly from the business account despite the business not technically owing without affecting the owners personal liability?

@gsm6120 2 ай бұрын

I have a 17 yr old LLC, can I still convert this LLC to be taxed as an S-Corp? Or do I have to create a new LLC?

@sugeeshdeveloper5443 4 ай бұрын

I started my s Corp in Jan 01st, and did not operate for 5 months, Should I still have to pay IRS, social security tax and other taxes, and quarterly statements to IRS ?