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  • LLC Owners

    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?
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  • #2
    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.
    http://www.lunchesruslawncare.com

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    • #3
      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.
      (352)682-3094 Suwannee River, Florida 32680

      Visit my site, http://www.lawnmoore.com, Thanks!

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      • #4
        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?
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        • #5
          I pay myself a salary

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          • #6
            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.
            www.painelesscreations.com
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            • #7
              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.
              (352)682-3094 Suwannee River, Florida 32680

              Visit my site, http://www.lawnmoore.com, Thanks!

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              • #8
                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.
                Last edited by jvholt; 02-19-2011, 02:57 AM.

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                • #9
                  Does anyone know where to find how much taxes, medicare, and SS should be taken out of the pay?
                  (352)682-3094 Suwannee River, Florida 32680

                  Visit my site, http://www.lawnmoore.com, Thanks!

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                  • #10
                    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

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                    • #11
                      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...ublink10007325

                      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

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                      • #12
                        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/...tor-taxes.aspx
                        http://www.lunchesruslawncare.com

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                        • #13
                          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!
                          www.painelesscreations.com
                          Visit us on Facebook
                          http://www.facebook.com/PainelessCreations

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                          • #14
                            . 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.
                            Last edited by jvholt; 02-19-2011, 12:56 PM.

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                            • #15
                              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
                              Welcome Advise, Incourage comments, and never stop Cutting. Geoff<img src="http://www.gopherforum.com/attachment.php?attachmentid=1595&d=1253928284">

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