TicketBroker, you would be correct if we were talking about a sole-proprietorship or partner owner, but we are talking about a corporation. A shareholder of a corporation is an employee and receives a salary (expense) plus distribution of profits (called dividends or cash distributions). Only the sole-proprietorship or partnership accounting uses the "owner draw" type account. Good luck in your accounting class.

pete posted a reply that told you of taxes you'll have to pay. just be aware that with social security and medicare taxes (called self employment tax) you'll actually be paying double what you would if employed by someone else. all employees and employers pay 6.2% ss tax and 1.45% medicare tax. when you are self employed you are both the employee and employer so you pay a total of 15.3% for the self employment tax. the irs does allow you to deduct half of this on your 1040 to offset some of the cost. there are lots of other forms and schedules you'll probably have to fill out. it would be very beneficial to consult a tax advisor to find out the options you have (you can also deduct the cost of these fees).

mimi4416, In his first post you failed to notice that the payroll is in a S-corp and the S-corp is going to pay the 15.3% (form 941) to the government as employment taxes and not self-employment taxes. The employer portion is an expense on the 1120s and not on the 1040. The employee withheld portion shows up on his employee W2 the same as it would on any other employee of the S-corp.