Is there a service for calculating and paying federal taxes on shareholder distribution payments?

Question

I currently run 1 man LLC that's taxed as an S-Corp in the US. My current way of paying myself is through a combination of running payroll and shareholder distributions. I currently have a business checking account which invoice payments are deposited into. For payroll, I use Gusto which calculates my tax withholdings and sends them to the IRS, then the rest is deposited into my personal checking account. For shareholder distributions however, I would like to use a service to do something similar. Ideally I'd give them the percent I would need withheld for taxes, then enter the gross amount of the shareholder distribution, and it would send part to the IRS and the remaining to my personal checking account. Does a service like this currently exist?

Answer 1

Does a service like this currently exist?

No, because it's not a thing. Shareholder distributions are just distributions - you transfer money from your company's account to your personal account. There's no withholding requirement there, and if you're a W9 US resident taxpayer (which you are, otherwise you wouldn't be a shareholder in an S-Corp) - no-one will withhold anything. How would it even be reported?

Instead, you would need to make quarterly estimated payments (using form 1040-ES), or adjust your paycheck withholding accordingly to account for the additional expected taxes.