For S-Corp owners
Your S-Corp and your personal wallet are not the same thing.
Money moves between you and the company, but every movement does not mean the same thing. Your accounting should know the difference.
The core difference
Six ways money moves. Six different accounting treatments.
Salary, distributions, reimbursements, contributions, shareholder loans, and loan repayments each route to a different destination. Choose one to see where it belongs.
Six ways money moves
You
Shareholder · 100%
Your S-Corp
The corporation
Accounting consequence
Distribution
Equity out. Not a wage, not an expense, and not deductible to the company.
- Direction
- Company → you
- Debit
- 3100 · Shareholder distributions
- Credit
- 1010 · Business checking
- Basis
- Reduces stock basis, dollar for dollar.
Distribution Readiness reports the factual bookkeeping context beforehand. The decision stays yours, and your CPA's.
Personally paid expenses + mileage
What the company owes you stays visible.
The mileage log applies the rate policy in force on each manual trip date. Personally paid expenses carry their evidence and age until settlement.
- 01
You pay
A business expense or trip starts in your personal wallet.
- 02
Capture evidence
Receipt, business purpose, mileage, and dated policy stay connected.
- 03
Company owes you
The approved reimbursement becomes a real liability.
- 04
Payment settles it
Bank evidence clears the amount without duplicating the expense.
Basis + Distribution Readiness
Know the record. Preserve the unknowns.
Stock basis and debt basis remain separate. Distributions affect the record, shareholder notes retain their own history, and unknown opening basis stays unknown.
Distribution Readiness reports bookkeeping context—current books, reconciliation, payroll, owner activity, and basis status. It is not tax approval or permission to take money out.
Basis position
Sample workpaperOpening basis
Source on file
Current activity
Current position
Opening figures retain their effective dates and sources. Book equity is never presented as tax basis.
Supporting workpapers
The owner-specific facts stay with the books.
Capture Tracker records payroll results; it does not run payroll. Professional judgments remain with you and your CPA.
Payroll results
Record wages, taxes, liabilities, and bank evidence from your payroll provider.
>2% health insurance
Keep coverage, amounts, payroll-inclusion state, and year-end review together.
Reasonable compensation
Preserve salary paid and context for CPA review without claiming to decide the answer.
Your accounting should know the difference between you and your S-Corp.
Give your CPA the organized record instead of rebuilding it at year end.