How do you take a profit from your business LLC or INC?

Question

Do you do it via a paycheck, some return on investment or some other method?

What's the most tax efficient method?

Answer 1

You earn a pay check. These funds are taken from the profit or the corpus of the entity depending on what type of contract you have with the entity. You can be a share holder and receive funds that way also or you can do both. For efficiency, I would consider drawing a wage. That way you can still hold shares and have the profit roll over back into the business.

With either a LLC or corporation (INC) it is a double tax situation. The LLC and INC pay taxes on the profits and you as an individual are responsible for your personal taxes.

Have you considered a Trust?