How to Pay Yourself from an LLC
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Yes, you can pay yourself as an employee of your LLC. Depending on the way you are taxed, you might go for a standard owner’s draw, or you may put yourself on the payroll of your company.
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Being Taxed as an S Corp
- Being taxed as an S corp makes sense for businesses that are generating enough profit to pay the owner a reasonable salary and at least $10,000 in annual distributions. The advantage of paying yourself as an employee of a C corp or S corp is that you can reduce your liability for self-employment taxes by paying yourself a reasonable salary and taking some more of your LLC profits as dividends.
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Paying Yourself from an LLC
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How do I pay myself as an independent contractor? If you choose to pay yourself as a contractor, you need to file IRS Form W-9 with the LLC, and the LLC will file an IRS Form 1099-MISC at the end of the year.
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Owner’s Draws vs. Salary