Kahuna Accounting was featured today at the Zen Payroll blog in an extremely informative post about how business owners can pay themselves.
Kahuna Senior Accountant, Carin Weiss-Krolikowski explained in the article:
“I think the most important thing for any owner of a small business, is to have a good bookkeeper and a trusted Tax advisor. When paying yourself, as a small business owner, many owners think they only have the option for owners draw. This, of course, is a viable option. However, if a company is formed as an S Corporation, they can pay themselves as a W-2 employee. Same is true with an LLC, if they claim to file taxes as an S Corporation. There is also the option of Guaranteed Payments, (as an LLC) where an owner can pay themselves a salary (no taxes withheld) and take the expense as a line item reducing the company’s annual tax liability. There are many more options than just an “owner’s draw”. Again, I would urge them to always consult a Tax Professional.”
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