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The first 10 years I was using S-Corp for "Side gigs". I did not take distributions or salary for like 8 years. The next 4 the income increased and I took a reasonable salary and very little distributions.
In 2019 I will probably net only $2000 because I did not do anything in the S Corp. I do not want to take a salary on $2000 as the fees are ridiculous for that little payroll.
My question is I have a lot of money from the last 14 years that I already paid taxes on. Can I take them as distributions (retained earnings) this year without a payroll in 2019?
It doesn't seem right if you earn $1,000,000 in a year and take $100,000 salary but leave the $900,000 in the account for future years that you would have to take a payroll in a year with no earnings just so you can access the $900,000.
It does make sense that you would have to take a salary in a year you are taking distributions IF you have net income to justify it.
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First, an S Corp has Employee(s). There is no such thing as making money, taking it or not, but you doing the work = you were the employee. Whoever did your taxes for your S Corp got it wrong all these years.
Next, distributions are after reasonable Wages for work performed. Removing equity as a distribution is taking retained earnings and is not payroll. But it is never done in lieu of payroll, either.
Lastly, you are in the wrong place on the internet. You do not seem to be a Tax Preparer professional using one of Intuit's Professional tax preparation programs. You seem to either mean to be in the TurboTax forum, which is not the right place for S Corp issues; or, you want free tax and accounting guidance, which isn't this place on the internet, either.
It is past time that you seek help from a reliable CPA; you have a lot that has gone wrong.
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