Overview of Paying Yourself from an LLC
An LLC is a hybrid business structure that combines some features of corporations and sole proprietorships. As an LLC owner, you’ll generally pay yourself through an owner’s draw, transferring the business’s cash to you for personal use. For multi-member LLCs, draws are divided among partners.
Payment Methods for LLC Owners
- For most LLCs, take distributions and make estimated tax payments.
- Recommended: Northwest offers LLC services to simplify taxes.
Specifics of LLC Payments
For single-member LLCs, write yourself a check from the business account, deposit it into your personal one. This “owner’s draw” means funds that the IRS taxes on your personal return. Options for multi-member LLCs need further explanation.
Tax Considerations and Other Factors
Your payment choice affects year-end tax burdens. Taxes heavily influence your LLC payment decision. Simplicity, liability protection, and potential implications for your company should also be considered.