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When a C corporation earns taxable income, the income is taxed at the corporate level.When the corporation subsequently distributes that income, the distribution is generally taxed to the shareholder as a dividend.A shareholder's stock basis is decreased, but not below zero, by.The corporation is responsible for telling the shareholder the amount of non-dividend and dividend distributions.Only earned income, your wages, or net income from self-employment, is covered by Social Security.You may have to pay income tax on pensions, annuities, interest, or dividends, but you do not pay Social Security taxes.They're paid out of the earnings and profits of the corporation.Dividends can be classified either as ordinary or qualified.
The simplest way to withdraw cash from the corporation is to distribute cash as a dividend.
Earned income would be from things like wages or self employment income.?