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This might be a silly question, but how do you go about paying yourself? I still have a day job, but soon I plan on printing full time. How do I go about paying myself for the work I do? My wife and I set up a LLC so I want to get all the financials in order before going full time.
 

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I also have a LLC and my accountant said to take an owners draw each month or whenever you see fit. Then, put away 40% of that draw to pay federal income taxes on at the end of the year.

At this point I pay myself once every two months or so since I have a regular day job. You've got to keep in mind though, if you are making money with that business and leaving it in the business (and not incurring expenses like new equipment) you will have to personally pay taxes on the profit as income. States grant you separation from the business with a LLC but the federal govt sees you and that business income as the same.

Good luck!
 

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You can take owner disbusments as mentioned. Or you can pay yourself as an employee. I Acually do both. Paying yourself cost more cause of taxes and employer cost on FICA and other related taxes.
 

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I am payed a small salary, pay social security, federal and state taxes. This was something that an accountant reccomended.
 

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You should get an accountant for tax purposes. Here are some basics.

  • You can take a draw, distribution or be paid as a W2 employee or both
  • Any profit at the end of the year will flow to your personal 1040
  • You can set up an SEP and fund it with profits from the LLC up to some limit, From what I remember it was the lesser of 25% of the profit or $40K for each person. This you can do by the tax filing due date, generally April 15.
  • Income from an LLC may or may not be subject to payroll taxes. Now this is a tricky one as the IRS has not ruled on it and has basically refused to do so.
  • For tax purposes you should send in a quarterly payment based on your previous year. The rule is you have to have pre-payments of 100% of your previous year or 90% of your current year taxes sent to the Treasury dept.
Good Luck.
 
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