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caz1
12-19-2004, 09:25 PM
Ok I know I'm geting anoning and this thread should be on just starting a biz but I don't get the answers on fourm that I get here. My question is how do you guys pay yourself are you salary or hourly or all profit is yours :waving:

SodKing
12-19-2004, 09:30 PM
I pay myself a weekly salary. It is based on the previous years profit, what the company needs to retain for upgrades and anticipated increases in the profit margin.

captaingreen
12-20-2004, 12:51 AM
Well, my first year I had a DBA checking acct. and wrote all expense both bus. and pers. out of this acct. and relied on my software to track which expenses were bus. and pers. related. I really didn't pay myself in the sense of a set amount, I just kept whatever was left over at the end of the year in the account, after Uncle Sam got his chunk anyway, for my personal use. Pretty much did the same most of the second year. Next year I'm becoming a LLC, so I'm kind of restructuring that system. I'm actually paying myself a set salary this coming year. My accountant actually came up with the number based on things growing slightly over what I did this year, and taking into account the best number that would help me out on the tax benefit of being an LLC.

mtdman
12-20-2004, 04:45 AM
Know your expenses. Put that money aside. Put aside whatever money you want for investment and improvements. The rest is profit, and take as much of that as you need to, when you need to. I've always just taken the money as I've needed it, nothing real regular. The longer I leave it in my business account, the less of it I spend. I suppose once I start hiring people and having a regular payroll, I'll start paying myself more regularly.


:D

BTW, what's the tax benefit of being an LLC? A single member LLC passes the profits through to the member, and that gets reported like a sole proprietorship on schedule C. There's no tax benefits there.

captaingreen
12-20-2004, 09:58 AM
Know your expenses. Put that money aside. Put aside whatever money you want for investment and improvements. The rest is profit, and take as much of that as you need to, when you need to. I've always just taken the money as I've needed it, nothing real regular. The longer I leave it in my business account, the less of it I spend. I suppose once I start hiring people and having a regular payroll, I'll start paying myself more regularly.


:D

BTW, what's the tax benefit of being an LLC? A single member LLC passes the profits through to the member, and that gets reported like a sole proprietorship on schedule C. There's no tax benefits there.
The benefit is the revenue that is not paid to me in salary. The way I understand it I'm saving the 7.5% social security tax on that money. All I know is my accountant says I would be saving over $2,000 on taxes this year if I had LLC'd as an S corp last year. Your a smart guy MTD, you should know that! :rolleyes:

coastallandscapesolutions
12-20-2004, 01:37 PM
You should really have a CPA advise you on this. Speaking from what I do, I personally own a couple of vehicles I lease back to the company at fair market valaue. I own the land that the shop sits on. Therefore the company pays me rent for use of the land. Then I draw a salary paid on the first of each month and a percentage of profits at the end of the year.

BOTURF
12-20-2004, 01:52 PM
Thats what my cpa did for me this year.... we are now a s corpand are registered with the fed goverment as such


XYZ Landscape Maintenance Services, INC.
dba ANY NAME
Saves paying the self employment tax as captain green stated and will save a bunch come april 15 . Payed myself a salary or my secetary treasuer did ( My wife ) every week . You need to get a good cpa, worth their weight in dollars for sure and pick his brain

Frontier-Lawn
12-20-2004, 02:16 PM
Here's how i do mine:
Monthly Income
15% Taxes
20% Expense's
25% Business Savings
40% goes to me

mtdman
12-20-2004, 03:28 PM
Whether it's a salary or profit, if it comes from your business you have to report it on schedule c and pay the self employment taxes on that. On schedule se, you report the net profit from schedule c, and base your self employment taxes on that. As a single member LLC, you must use schedule c to report your income just like a sole proprietor.

I am a smart guy, I do know that!

captaingreen
12-20-2004, 03:32 PM
Whether it's a salary or profit, if it comes from your business you have to report it on schedule c and pay the self employment taxes on that.
Me and my CPA reserve the right to disagree with you :D

mtdman
12-20-2004, 03:33 PM
Me and my CPA reserve the right to disagree with you :D

Then you are both wrong. My CPA advised me when I did my LLC last year. How are you reporting your profit from the LLC then?

captaingreen
12-20-2004, 03:35 PM
Then you are both wrong. My CPA advised me when I did my LLC last year. How are you reporting your profit from the LLC then?
Well I quess I, as well as Boturf, and probably a million other LLC's are all wrong then, darn!

mtdman
12-20-2004, 03:37 PM
How do you report your profits from your llc?

I've got my tax books right here in front of me, and what I'm saying is straight from the book. A single member LLC, which is a limited liability company, the profits pass through to the owner and the owner reports the profits as a sole proprietor on schedule c. You have to take your net profit from schedule c and apply self employment taxes on that, and add that to your income tax.

Sir mowsalot
12-20-2004, 03:47 PM
Ive noticed no one mentioned taking out 10% for tithes. Paying tithes is not a good thing its a requirement. Pay your tithes and ask the lord to bless your business and he will.

mtdman
12-20-2004, 03:48 PM
Ive noticed no one mentioned taking out 10% for tithes. Paying tithes is not a good thing its a requirement. Pay your tithes and ask the lord to bless your business and he will.
LOL! That's funny. Tithes. Requirement by who? :rolleyes:

:D :D

BOTURF
12-20-2004, 05:41 PM
I Guess my cpa is wrong !!! NOT .... He does the taxes for several large national corps and i sure trust what he is telling me. Iam i guess not a single member or what ever you were talkig about as we created a corp and iam the president .. COO and the wifey is the sec. treasure and we have to have board meetings and all ( at least on paper we do lol ) so with that said i own 90 % of shares in the company and she owns 10 % which she is still pissed about lol and we run this just like a large company tagging all expences and costs and everything then pay uncle sam every quarter, like i said get ya a good cpa and dont try to do it yourself a good cpa will go to bat for you if a audit appears and you stand a better chance with him on your side than going in a trying to defend your self.

mtdman
12-20-2004, 06:15 PM
An LLC is different from a corp, an inc, and a co. Different from a corperation, no minutes, no officers, etc. You are not an LLC if you are an S corp. What I said doesn't apply to you, just sole member LLCs.

I do have a good cpa and an attorney. And I do my research.

locutus
12-20-2004, 07:07 PM
You should really have a CPA advise you on this. Speaking from what I do, I personally own a couple of vehicles I lease back to the company at fair market valaue. I own the land that the shop sits on. Therefore the company pays me rent for use of the land. Then I draw a salary paid on the first of each month and a percentage of profits at the end of the year.What do you do with the vehicles upon recapture? I suppose you could give them to yourself as a gift and thereby avoid the "hit".

captaingreen
12-20-2004, 07:15 PM
An LLC is different from a corp, an inc, and a co. Different from a corperation, no minutes, no officers, etc. You are not an LLC if you are an S corp. What I said doesn't apply to you, just sole member LLCs.

I do have a good cpa and an attorney. And I do my research.
I am an LLC but set up to file as an S corp., if that doesn't make sense, take a class or get a new CPA. The co. is owned by me and my wife, like Boturf mentioned earlier.

tonygreek
12-20-2004, 09:42 PM
ooops, just realized you're all on the same page now as far as llc's and their taxation options.

my llc's are taxed as s-corps as well.

tony

fastpitcher
12-20-2004, 10:44 PM
I don't get paid??????

grass-scapes
12-21-2004, 06:23 PM
Pay? Salary? Whats that. I do an "owners draw" when I need money for mortgage, etc. The rest stays in the business account. I am exploring options for either LLC, S-corp, or something along those lines for 2005.

richard coffman
12-21-2004, 06:31 PM
You should really have a CPA advise you on this. Speaking from what I do, I personally own a couple of vehicles I lease back to the company at fair market valaue. I own the land that the shop sits on. Therefore the company pays me rent for use of the land. Then I draw a salary paid on the first of each month and a percentage of profits at the end of the year.


Sounds like you've got your bases covered, i should look into getting a CPA for my finances, and go the rout your going. like this idea.