When I fill out my companies tax forms at the end of the year, I’m allowed to claim a certain amount of depreciation against my income— my profit.

I pay myself dividends throughout the year— oddly enough, these dividends directly lower the value of my company, since it’s money being paid from the company to me. Because I’m an S corporation, I’m allowed to treat that profit against my normal income tax— but every red cent I pay myself is considered profit. Either the corporation or I is judged to have made the profit.