Say, for example, I get a loan from a private investor in the amount of $50,000, and deposit that into a bank checking account under a multi-owner LLC (I am part owner). To pay myself a salary/wage, should the LLC just write me a check from the account on a bi-monthly basis? How would I be classified for tax purposes? (Employee?/ Self-Employed?, Etc.) I know this is a complex question; any contribution is much appreciated?
2007-02-27 07:20:26 · 2 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
You can decide how you want to handle it. Even if you are a partnership you can pay yourself a salary (not guaranteed payments). If you pay it as salary you will have to file payroll taxes. If you take distributions that are not taxed as wages they are considered "guaranteed payments" and when you file your tax return you will end up paying self-employment taxes.
There are problems involved if one owner puts in property and you take that property out as compensation. Get help from a CPA if you plan on doing things like that.
2007-03-01 15:09:46 · answer #1 · answered by Nusha 5 · 0⤊ 0⤋
That depends upon the legal structure of the company. If it's a corporation, you can be an employee as well as an investor. If it's a partnership, you are an onwer, not an employee and your income isn't wages but self employment income.
2007-02-27 15:25:59 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 1⤋