AmitaR
Employee Tax & Finance Expert

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.

LLC or S Corp

 

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Have an amazing day.

AR (CPA 10+ years)

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