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How to Pay ourselves as business owners?

1,405 Views | 7 Replies | Last: 7 yr ago by The Wonderer
TheAggieInventor
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10:20a, 4/11/17
Howdy, my partner and I are in the process of forming an LLC. We have no employees and will be the governing heads and workers of the business. As the only ones receiving income, we are seeking advice on the best tax advantaged way to pay ourselves either out of profit, or payroll.

Any thoughts?
Thanks and Gig'em
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jschroeder
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10:45a, 4/11/17
Do you each make more than what would be considered a reasonable salary?

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The Wonderer
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12:20p, 4/11/17
AG
Reasonable salary for position/type of work/location and the remainder as distributions of proceeds.

This is the general answer.
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Bonfire1996
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In reply to The Wonderer • 1:28p, 4/11/17
AG
The Wonderer said:
Reasonable salary for position/type of work/location and the remainder as distributions of proceeds.

This is the general answer.
This. Every 3-6 months have a distribution of a certain percentage of the retained profits. Be aware that as you move forward in subsequent years, you may need to pay as much in payroll taxes as you did in the previous year if you grew, or be subject to penalties and interest even if you file on time.
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gougler08
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2:21p, 4/11/17
AG
I would just get paid in bitcoin
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BigPuma
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4:28p, 4/11/17
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Guaranteed payments for a flat amount a month or whatever regular frequency. Remainder taken as ordinary distributions from a partnership
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gigemhilo
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8:32a, 4/12/17
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agree with Puma. No need to add the complication of payroll in this situation. If you hire employees, THEN you pay yourself a salary.

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SG09
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11:14a, 4/12/17
AG
seems you should define how the llc should be treated first. all of the above are a mix between 1065 reporting and 1120s reporting. you'll need to pick that before you pick from the responses above. if you're saying "partner" because it's 1065 the guaranteed pants will work.
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The Wonderer
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In reply to SG09 • 11:37a, 4/12/17
AG
SG09 said:
seems you should define how the llc should be treated first. all of the above are a mix between 1065 reporting and 1120s reporting. you'll need to pick that before you pick from the responses above. if you're saying "partner" because it's 1065 the guaranteed pants will work.
I want some of the guaranteed pants! Where can I get some?
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