How do you pay yourself a salary and distributions as a llc taxed as an s corp business owner through Intuit payroll?

Good day, @Geo2199.

Thanks for reaching out in the QuickBooks Community. 

With regards to paying yourself in QuickBooks, I'd recommend reaching to an accountant. Both commissions and bonuses checks are taxed differently than a simple salary. They are taxed in w 2s and 1099s tax forms as supplemental wages and the amount withheld is not the same

If you create a regular check to pay yourself, this won't be taxable since it's not a payroll transaction.

Aside from paying yourself by taking a salary, you can also compensate yourself with an owner’s draw. To understand their differences, you can check out this article: Owner’s draw or salary: How to pay yourself.

The Community always has your back, so please let me know if you have any other questions. I'll be more than happy to help. Keep safe. 

Thank you for your reply and information. My question is how do I get quickbooks payroll to deposit a once a month distribution direct deposit into my account as well as my regular every two week salary? A check on the second and last Friday of every month for my regular salary and a single distribution check at the end of the month. I didn't want to process it as a bonus or commission payment due to more taxes having to be paid versus it being classified as a distribution payment.

I appreciate your time getting back in here, @Geo2199.

We can set up a direct deposit. Then, create a separate pay schedule for monthly and weekly salaries. 

With payroll, you can set up a direct deposit and pay your employees with electronic deposits directly into their bank accounts or pay cards. 

To start, set up your company payroll for direct deposit. Then, get a direct deposit authorization form. 

1. Select the Taxes menu and choose Payroll Tax.
2. Click Employee Setup.
3. When you reach Authorization for Direct Deposit, choose Bank Verification.
4. Click View and print.

After you complete this setup, the next paycheck you create for yourself will be a direct deposit. You can check this article for more details: Set up your company payroll for direct deposit.

Then set up and manage your pay schedules in QuickBooks. 

Feel free to go back to this thread if you have other payroll concerns. I'll be around to help. Have a nice day.

I have the same question and it doesn't look like either of the previous "answers" answered your question at all!  Did you ever figure it out???

Thanks for joining us here in the Community, @switching from desktop to online.

I have some insights to share about processing your payroll in QuickBooks Online.

As mentioned by my peer above, you can set up a direct deposit for your payroll. This way, you can create a separate paychecks for your salaries. To guide you in setting up the direct deposit, please follow the steps presented above.

Once done, you can now start creating paychecks for your salaries. You can check out this link attached to guide you with the set up and the process: Create paychecks in QuickBooks Online.

In terms of how to handle your taxes, I'd still recommend reaching out to your accountant. They'll be able to give you the best course of action for your business.

You may also seek help from our accountants through this site: Find an accountant or bookkeeper who loves your business as much as you do.

Lastly, I'm adding here an article about the tax calculation in QuickBooks Online for your reference: How to calculate payroll taxes: Tips for small business owners.

I'll be right here to help if you need anything else concerning payroll. Just leave a reply below. Keep safe!

So quickbooks does not have an option to pay yourself for "Distributions" for an S-Corp and take the correct tax out...Is that correct?

Thanks for joining this thread, Sean.

You can pay yourself for Distributions by creating a check. I'll show you how. 

1. Go to the + New menu in your QuickBooks Online (QBO) account, and select Check.
2. Choose the bank account where your money will be withdrawn.
3. Fill in the check fields. In the Account field, be sure to select Owner's equity. 
4. Select Save and Close.

You can also see this link for more details: Create and record checks in QuickBooks Online.

I'd also recommend working with your accountant for other ways in paying yourself for distribution. This way, we can ensure your accounts is well accounted for.

Furthermore, I'm adding these links that you use for reference. These contain details on how to seamlessly manage your payroll and accounts:

• Supported pay types and deductions explained
• Learn the reconcile workflow in QuickBooks

You're always welcome to post a reply if you have other follow-up questions about paying yourself in QBO. I'll be around to back you up anytime. Keep safe!

This STILL does NOT answer the question above.... QUICKBOOKS get with the program. 

How do we set up direct deposit to ourselves if we are a self employed LLC s-corp. We should not be 1099 ourselves and writing checks is too redundant. We want to take advantage of paying ourselves using direct deposit without deducting taxes or 1099????

@193514786136559 

By definition, you are not self-employed if you're an LLC taxed as an S-corp.  If you work in the business, you are required to pay yourself a reasonable salary subject to withholding.  Paying yourself distributions in lieu of a salary avoids "self-employment" taxes and the IRS doesn't like that. 

doesn't look like answer was ever answered. How do you pay yourself a distribution thru direct deposit? I only see the option of creating a check. is there a direct deposit option?

Glad to see you here, @jennfr00.

The ability to pay owner distributions electronically in QuickBooks Online (QBO) is currently unavailable. You must write a check by hand. Before you do so, make sure you already have an Equity account. I'm here to share details about the owner's draw in QuickBooks Online payroll.

An owner's raw is a type of equity account in which QuickBooks tracks withdrawals of assets from the company to an owner. I'll give you the step-by-step procedure on how to set up an equity account.

Here's how:

1. In QBO, go to the Accounting menu at the left pane to get to the Chart of Accounts page.
2. Click the New option at the upper right. 
3. Pick Equity in the Account Type drop-down, then choose Owner’s Equity in the Detail Type.
4. Enter an opening balance and hit Save and close.

Then, let's write a check:

1. Go to the + New option at the upper left to get to the Check. 
2. Select the bank account where your money will be withdrawn.
3. Enter the necessary information, including the Owner's equity you created in the Account field.
4. Hit Save and close.

For more details on the process, see this article: Set up and pay an owner's draw.

Alternatively, you can add more accounts as needed to track different types of transactions. Here's how to add more accounts to your accounting chart: Add an account to your chart of accounts in QuickBooks Online.

If you have any further questions or concerns, please leave them in this thread. I'm more than happy to help. Have a fantastic day!

I have QB desktop, im trying to figure out how to pay member distributions for the a1st time. does writing the check via desktop record everything where it should go?  can anyone give me a step by step. 

Hello there, @jackpot.

Let's write a check from an owner's equity account so you can pay member distributions (for the first time) in QuickBooks Desktop (QBDT).

Yes, writing a check will record your member distribution payments in QBDT accordingly. As long as you use the appropriate account (Owner's Equity), you can track withdrawals of your company's assets to pay one of the owners.

To do this, you'll first need to create an Owner’s Equity account. Make sure to choose Equity or Owners Equity as its type. Here's how:

1. Go to the Lists menu.
2. Select Chart of Accounts.
3. From the Account dropdown, select New.
4. Select Equity or Owners Equity as its type, then select Continue.
5. Complete the account details.
6. Select Save & Close.

Once you're done, create or write a regular check that affects the Owners Equity account you created. To do this, here's how:

1. Go to the Banking menu and select Write Checks.
2. Select the bank account which the money will be taken from.
3. Enter all the necessary information, including the Owner's equity you created in the Account field.
4. Click Save & close.

If you wish to know more about the proper procedures for compensating or paying members/owners of a sole proprietor business, you can refer to this page: Paying Yourself.

Also, I encourage you to reconcile your accounts in QBDT regularly (every month). This helps monitor your income and expense transactions and detect possible errors accordingly. You may want to check out this article as your reference to guide you in doing and fixing reconciliations in QBO: Learn the reconcile workflow in QuickBooks.

Please don't hesitate to comment below if you have other concerns about paying member distributions in QBDT. I'll gladly help. Take care, and I wish you continued success, @@jackpot.

Thank you

Your message means a lot to us, jackpot.

If there's anything else you need help with paying member distributions, it's my pleasure to help you as well here in the Community forum. Have a wonderful week ahead!

So, I found a really helpful video that takes it step by step.  

As distributions are considered owner's draws, this video takes it step by step.

https://www.youtube.com/watch?v=z5EHpQChciI

Kristina

2+ years later and QBO still cannot do this.  Here's my workaround -

Create a Reimbursement type under Additional pay types.  Name it "Owner Draws".  This will correctly add the draw to the paycheck without taxing it.

This will create an expense account Reimbursements:Owner Draws. If the amount is the same every paycheck, create a recurring journal entry to debit the equity account and credit the expense account to happen every payroll.  If the amount is different, you will need to manually enter the journal entry every payroll.  That will move the draw amount to the correct equity account.

This is not the best way to handle it, but it does give the S-Corp owner a way to have their draws direct deposited instead of having to do a separate check/transfer.

Maybe one day Intuit will use some of that money we're paying them to make this work the right way.

penrodcpa

This is the method I use as well, with some minor tweaks. I find it more convenient than creating a Vendor and using the Quickbooks Bill Pay method. The owner draws/distributions just go out with paychecks through payroll.

I create the reimbursement type as you do, but I then go to Payroll Settings -> Accounting -> Wage Expenses and change the category for this reimbursement to a liability account (which I name "Owner Draw/Distribution Advance") instead of an expense account. This way, owner draws/distributions don't go to the P&L report. Ideally, you would categorize it directly to an equity account where it belongs, but it will not let you choose equity accounts. So, at the end of the year, you can move the full amount in the liability account to the correct equity account of "Owner/Shareholder Draw/Distributions".