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User7851231
Level 2

Is there any real difference between an owners dividend or an owners distribution in an S-Corp?

Does it matter, how we categorize this transaction for IRS or QB purposes? 

Solved
Best answer January 25, 2022

Best Answers
Rainflurry
Level 13

Is there any real difference between an owners dividend or an owners distribution in an S-Corp?

S corps do not pay dividends, they make distributions.  Dividends are paid out after-tax and, since S corps are not taxed at the corporate level, they do not pay dividends.  

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4 Comments 4
Rainflurry
Level 13

Is there any real difference between an owners dividend or an owners distribution in an S-Corp?

S corps do not pay dividends, they make distributions.  Dividends are paid out after-tax and, since S corps are not taxed at the corporate level, they do not pay dividends.  

jennfr00
Level 2

Is there any real difference between an owners dividend or an owners distribution in an S-Corp?

were in chart of accounts do we categorize owners' distribution in an S-corp.?

Rainflurry
Level 13

Is there any real difference between an owners dividend or an owners distribution in an S-Corp?

@jennfr00 

 

Create an equity account called "<Shareholder Name> Distributions - 2022".  IMO, it's nice to have a separate account for each shareholder for each tax year.

jennfr00
Level 2

Is there any real difference between an owners dividend or an owners distribution in an S-Corp?

Thank you just want to make sure I did it correct. Name Distribution-2022-Jennifer, Type: Equity, Detail Type: Partners Distribution? 

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