The “K-1 distribution” is actually an owner’s draw, and it doesn’t have to be done only at year end so long as you don’t take more than the equity you have in the company throughout the year. The lower rate comes from not paying payroll taxes on that money. (I’m an accountant ) But yes, putting that money in a savings account and then dividing it by 12 (or 24, depending on how you want to take a “paycheck”) is a good idea!