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Business & farm
Hello Susiefraga,
As a sole proprietor or a Single Member LLC, you should not pay yourself a traditional salary, instead you can take Owner Draws from your business profits. For tax efficiency, you may elect to file a S-Corp. In that case you are required to pay yourself a Reasonable Compensation and take additional money from the company in the form of dividends or distributions. This allows you to avoid some of the self-employment tax on the earnings of your business.
Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful!
Have an amazing day.
AR (CPA 10+ years)
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‎November 13, 2024
12:04 PM