Withdrawing money from business checking account

[linda820pm]

How do I withdraw earnings in my business account to my personal checking account. I rarely take a salary.  Is there a limit to how much I can withdraw for personal use?

[Laura_CPA]

Hi linda820pm, 

Hope you are doing well. If I may ask, what type of entity is your business? Sole proprietor, Partnership, Corporation Regular or C, Limited Liability Company? 

[linda820pm]

LLC.  I am an independent contractor working from home.

[Laura_CPA · Accepted solution]

Thank you for answering that question. In your case, you would not be able to pay yourself a salary, but you can take owner's draws from your business to your personal account for your personal expenses. The limit? You can take up to 100% of your profits and equity, but you have to be careful you leave enough money for the operations of the business. 

Hope this helps answer your question. 

Cheers,

Laura 

[linda820pm]

Thank you so much for your thorough answer.  I appreciate your help very much.

[linda820pm]

So, should I write myself a check and write "draw" on the lower part of the check where it says memo?

[VolvoGirl]

Sorry I thought this was a different question.

[linda820pm]

Thank you, but as income I earned, why don't I have to report it on my income tax?  Or do you mean I don't have to report I took a "draw" on my income tax?  Thank you.

[VolvoGirl]

In your other question you said you file your LLC on Schedule C?  You don't report the draw on your tax return.  It is not a business expense.  It's all your personal money.  You just fill out Schedule C.  The Net Profit or Loss gets reported.