Firstly, as a first-time poster here, I am very grateful to anyone who can help me.
In a nutshell: I have an S-Corp that I registered in 2013. In 2014, I made the mistake of not paying myself enough, both in terms of my salary and dividends.
This year, I am paying myself a salary and my CPA has told me that:
1. I can't pay myself more than 40% of my total income in dividends.
2. My dividend payments can't exceed my profit for this year.
The problem is that I made a profit of $20+k last year and want to pay myself the majority of this as either income or dividends (preferable). Can I draw on this money as a dividend now (i.e. the opposite of what my CPA told me)? Is there another way to do this? Or should I pay myself a higher salary this year, pay more taxes, and not take anything out as a dividend?
Thanks again for anyone who can help.
In a nutshell: I have an S-Corp that I registered in 2013. In 2014, I made the mistake of not paying myself enough, both in terms of my salary and dividends.
This year, I am paying myself a salary and my CPA has told me that:
1. I can't pay myself more than 40% of my total income in dividends.
2. My dividend payments can't exceed my profit for this year.
The problem is that I made a profit of $20+k last year and want to pay myself the majority of this as either income or dividends (preferable). Can I draw on this money as a dividend now (i.e. the opposite of what my CPA told me)? Is there another way to do this? Or should I pay myself a higher salary this year, pay more taxes, and not take anything out as a dividend?
Thanks again for anyone who can help.
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