Owners Distributions: What You Need to Know

[@SavantStudio]

Thanks!

[@ClaraCFO]

Thank you so much!!!

[@jodiblackwell9698]

So Glad that I found your tutorials, which I have subscribed to. You explain everything so well, I still have a lot of your tutorials to watch, I am learning so much from you, so a very big thankyou.🙂

[@ClaraCFO]

Love to hear it!

[@AshMalik]

I absolutely agree! I am also so happy that I found your tutorials.

[@accountinglearning]

Great Video, Thank you so much.

[@PamelaLewerenz]

Would love an additional video on how much an owner should think about drawing from the profits...

[@ClaraCFO]

Working on this!

[@colsar]

As you mentioned, an S-Corp owner is probably taking a salary and distributions. You showed us to set the owner up as a vendor for the equity distribution. I assume the owner is set up a 2nd time as an employee for the W2 portion?? Thanks! Joe.

[@rzen798]

Could you please create a video detailing the entire process of what to do when you have a client for the first time as a bookkeeper? Include the initial steps, the do's, and the don'ts. We would really appreciate it! Btw, thanks for your video we really appreciate it. Very informative and helpful.

[@sarakappler3059]

Great video as always.

[@ClaraCFO]

Thanks for watching :)

[@dgvt7845]

Your content is so helpful. Thank you.

[@ClaraCFO]

I’m so glad!

[@bookeepingpros]

Thank you, could you show the next step iie. when you clear out the balance sheet line item for the distribution to retained earnings?

[@williamhdenney3897]

Really valuable information.

[@ClaraCFO]

I try :D

[@wilsoncollins-byrd5248]

Great video, thank you!🙏🏽

[@clownprincetv7793]

Thank you for this! I am a new subscriber and want to learn from your videos.

[@ClaraCFO]

Thanks for being here!

[@MelissaCalandro]

Very helpful info!

[@SavantStudio]

Thank you! I have learned SO much from your videos. I own an LLC with S Corp tax status. I am the only owner and only employee. I have already set myself up in QB as a W2 employee. Am I understanding you correctly that I also need to set myself up as a vendor when I categorize my Owner's Distribution bank transactions? So basically I will be in QB as both an employee and a vendor? Thank you!!

[@BrittanyBrown-yp1tk]

I would love a how much to distribute as OD video

[@amyc.3688]

How is the tax paid for distributions? Is it more beneficial for an owner to take a higher distribution vs a lower salary? Which one is lesser on the tax bracket for an S-corp?

[@ClaraCFO]

You need to pay yourself a "reasonable compensation" in W2 wages as a S-corp owner. The profits of the business will be taxed regardless of how much you take for distributions.

[@debrathompson554]

Love your channel! I would love to hear about how to grow your business.

[@ClaraCFO]

thanks for being here! Noted!

[@docash]

Thank you for this, I've been wondering how to set up a draw....I have used Quicken for personal accounting for years, and just started a new sole proprietorship. I plan on using quickbooks for isolation of business from personal, but can you maybe discuss is there a pathway to tracking both on quickbooks? Or is it better to maintain complete separation?

[@ClaraCFO]

good question. I recommend separating them completely - you can keep your quicken for personal and set up a QBO file for your new business (congrats by the way!). I use Monarch for my personal finances and QBO for the business. I've thought about if it's even possible to do both in QBO, and it really isn't.

[@Ncstefanie]

What would be an appropriate proportion for an owner of an S Corp. which usually pays herself via W2 to instead split her annual income between W-2 and distributions? Do you have a video that talks about that? Thanks!

[@bruno2006]

40/60

[@ClaraCFO]

There is no rule about percentage breakout between the two. You need to pay yourself a "reasonable compensation" in W2 wages as a S-corp owner. We are planning more videos on reasonable compensation!

[@Bill56136]

How about business owners drawing money out of the business account and use the money to pay off a business vehicle loan? It is still considered an owner draw?

[@ClaraCFO]

No, the business vehicle loan should be on the balance sheet as a debt, and that payment would be recorded against the loan to reduce the loan balance.

[@truthseeker6610]

If the business is at a "loss" where does the "distribution" funds come from?

[@ClaraCFO]

Existing cash balances. This could be from past profits that were retained in the business or it could be coming from borrowed funds.

[@flyzone7441]

😊😊😊

[@flyzone7441]

😊😊😊

[@JettingChen]

10:20

[@JettingChen]

!!