Question: My wife and I draw a salary as employees of the small S-Corp company we own. There are additional business profits that reside in the business bank account and are not drawn as salary or as owner distribution. What do we consider when estimated our yearly income?.
Answer: S corporations and partnerships pass through the reporting of the company's entire profit to the owners. You and your spouse are liable for taxes on the corporation's profit whether or not it was distributed. Those profits are included in your 1040 AGI upon which Covered California eligibility is based.