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Paineless Creations
02-17-2011, 09:04 PM
So I switched over to an LLC last year and I have a question for you owners out there. How do you pay yourself? I am set up to have employees- do you add yourself as an employee? Do you just take money out and do a jounal entry in your books... How do you guys do it?

jymie
02-17-2011, 10:37 PM
Being the owner of the business, your income will be what is left after all other expenses. Your payroll and expenses to run the business. At the end of the year when you do your taxes is when that comes into play. Expect the first couple years that you will claim a loss. I would not include myself as an employee to draw a paycheck, as that would appear that you are earning more than just being an owner. If that makes sence.

LawnMoore
02-18-2011, 12:09 AM
jeez i agree, its hard to profit as i have spent most of my personal savings to keep afloat the business.. loss i will claim.

I would do it that way also, or just be an emplyoee getting minimum wage only. then at the end of the year, if the profits are there, buy something usefull for the business to make you make money faster the new year!

Thats a tax writeoff when u use profit to buy more equipment.

You should get some sort of check every month atleast and pay some tax on it, we have to pay taxes just go ahead and make it easy, if your at a loss at the end of the year, i think you get taxes back, but not sure.

Steve
02-18-2011, 03:35 PM
So I switched over to an LLC last year and I have a question for you owners out there.

Did you switch over by yourself or did you have an accountant or lawyer help you?

What made you want to switch?

950thomas
02-18-2011, 04:23 PM
I pay myself a salary

Paineless Creations
02-18-2011, 11:45 PM
Did you switch over by yourself or did you have an accountant or lawyer help you?

What made you want to switch?

Really I wanted to protect my house if anything happens (personal assets) and as you know I got a commercial account so I got General Liability of 2mil and changed to an LLC. I'm going to need some help with my commercial account so going to need to hire an employee. I really just want to be legit and grow this thing to the best of my ablilty. Also I did it myself online do not have a lawyer or an accountant.

LawnMoore
02-19-2011, 12:08 AM
You still need to pay yourself something, to keep uncle Sam's cronies off your back.

Even if its 100 dollars a month sallary.. and pay the tax's on it too.

jvholt
02-19-2011, 01:43 AM
I have an LLC my accountant told me to go ahead and pay myself. My wife actually writes the check, It just felt wierd writing a check to myself. I pay myself a salary just like any other employee. I with hold taxes, medicare, and SS. The way the accountant explained it to me was that the LLC is its own entity and even though I am a member I am still an employee of the LLC. I also set it up online at the State of Texas website, pretty easy but cost a little more than I thought it would. In Texas an LLC is subject to a franchise tax as well, but like you I thought it was smart to seperate and protect my personal property from any potential lawsuites.
For me it's a lot easier to let an accountant worry about the taxes.

LawnMoore
02-19-2011, 02:46 AM
Does anyone know where to find how much taxes, medicare, and SS should be taken out of the pay?

hansons_lawncare
02-19-2011, 03:18 AM
i have seen things on quickbooks or just searching for a paycheck diduction calculator.

does anyone have the issue of starting out and buying a truck, and trailer, and weed whip, and a back pack blower, and a hand blower, and zero turn, and a push mower, and a bagger, and gas, and office supplies, and advertizing, and repairs and finding themselves writing off a loss for the year and unable to get a loan without a showable income.

i have seen online, legalzoom, they will get you all set up with an LLC. idk if id trust a program over someone you can go to if there is a problem but they say that it will hold up in court

zmower
02-19-2011, 07:56 AM
Does anyone know where to find how much taxes, medicare, and SS should be taken out of the pay?

If you are going to have a profit or tax liability of more than $1,000 you must pay estimated tax on a quarterly basis. http://www.irs.gov/publications/p505/ch02.html#en_US_publink10007325

You actually pay and file the medicare and ss with Schedule SE at the end of the year. http://www.irs.gov/faqs/faq/0,,id=200194,00.html

jymie
02-19-2011, 08:43 AM
Does anyone know where to find how much taxes, medicare, and SS should be taken out of the pay?

Try this site to figure how much to withhold from paychecks, seems like it will work for employees.

http://www.bankrate.com/calculators/tax-planning/401k-deduction-calculator-taxes.aspx

Paineless Creations
02-19-2011, 10:50 AM
Last year I bought all my equipment with any profit from the business. This year I would like to show the reason why I do this (money), trust me I am having a blast with this business and love what I do. But if some day I plan to take this full time and quit my regular job I would like to figure out how to make some money. I do understand end of the year taxes and it’s all attached to me. But I can’t turn to the wife and say “well we get some at the end of the year”. I’m trying to figure out what to do legally. Granted the money will be in my business bank account which I own. But just to do a withdrawal once in a while is kinda weird and I never know what to punch into QuickBooks.
So then… let me rephrase the question. Fast forward two years. Let’s say I have no regular job and I am out everyday mowing lawns and my house payment is due. My business bank account has about $10,000. I have built that amount after 2 years and I am showing a profit in my QuickBooks of about $2,000 a month after expenses and my business bank account is growing… it is in the middle of July. Not doing taxes any time soon. Should I be on the payroll as an employee? Some of you say take a small salary. Is that how you pay your bills if you’re doing this full time?
Thanks for all the answers-everyone's unique take on this helps me as I figure out how to grow my business!

jvholt
02-19-2011, 11:49 AM
. Should I be on the payroll as an employee? Some of you say take a small salary. Is that how you pay your bills if you’re doing this full time?
Thanks for all the answers-everyone's unique take on this helps me as I figure out how to grow my business!

Yes, I pay my personal bills with my salary just like I have a job. House payment, wifes car, groceries, elecrtic, TV, child care, wifes phone....My business is completely separated from personal.
As far as payroll deductions I use Peach Tree accounting software it figures them for me when I do payroll. Then I pay Uncle Sam once a month on the EFTPS website and file Form 941 every quarter.

FloridaBoy
02-19-2011, 07:03 PM
To be legal and be a "real" business, treat it like one.
Even though you are the owner of the company there is a worker....YOU.
You are the employee. Just like any other business they pay there employees by the hour or salary.

If you have not done so, do a personal budget,( mortgage, utilities, groceries, credit debt, play money, etc.) Totall that up to see what you need to cover your bills, divide by 4 and pay your self that amount every week.

If you have an accountant, ask them to give you the numbers you need to figure out what has to be set asside for SSWT, MWT, & FWT.

Keep in mind, your business and you (personally, the employee) share the responsability of the SSWT and MWT, meaning business pays half (write off) and you pay half.

I will go see if i can find the numbers that i have for my figures (keep in mind im in Florida and have no state tax) and post them up here with an example.

Hope this helps, Happy Tax Law Learning, haha:p

AttractiveLandscape
02-20-2011, 11:54 AM
You should always pay yourself. That being said, if you run your business out of your home you can have the business pay a percentage of your mortgage and utilities and then you pay the rest out of your pocket as you would normally. You mentioned Quickbooks... it has an area for employees to be setup and also payroll capabilities. I believe it is like $325/yr for unlimited employees and it automatically downloads your tax tables for your area. QuickBooks is a powerful and great software that will be your biggest friend, take some time to play with it and view some tutorials... you will find that it's many features are more than capable of carrying you through anything. Don't forget that the Gopher Software integrates with it as well;)

gogreenlc
02-27-2011, 08:52 PM
My LLC cost me $152.00 and i did it myself. I googled Secetary of State of Alabama and it had the links i needed to go to print off the application. Then i took it to our county courthouse an paid for it.. $100 went to Secretary of State and the $52.00 went to the County corthouse. Thtey stamped the application and i got my LLC. Bye passed all those other charge that lawyer charge. So, google Secretary of State of your state and it may workout the same way mines did.