I'm confused as to what tax brackets I should be using to estimate my taxes due for my s-corp's distributions.

For example, let's say my salary is at $37,450, which would put me in the 15% bracket (after the first $9,225 of course).

To keep it simple, say my distributions would be $53,300, putting my total income at $90,750, or at the 25% bracket past $37,450.

My question is, should I calculate my ETP's for the distributions at the 25% bracket? It makes sense to me that the distributions would accumulate on my income after salary.

BTW, I'm fully aware of how the IRS may frown upon the salary to distributions ratio mentioned above. I only choose these numbers to keep the example simple, as they fall directly into the current (2015) schedule.

Thank you!


You calculate your ETP based on the total amounts. You then adjust, if you wish, either your W4 to reduce withholding, or your ETP to account for withholding. In the end, you're expected to cover all of your tax liability with withholding + ETP.

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