Accounting - how to pay yourself for LLCs

DerrickDerrick Posts: 2subscriber
Quick question for all the accountants out there -
I have been told two different things on how payroll should be handled for our business.  First of all - we have a small LLC (partnership - my wife and I).  We both work full time jobs and the LLC is something that we do in addition to "regular" jobs.  We would like to pay ourselves once per quarter.  How should this be handled?  I have been told to cut ourselves a check, and claim it in Quickbooks as a equity disbursement since the business profit will be added to our personal income at the end of year.
I have also been told to register with the IRS, receive the coupon book, and cut payroll just like every other company.  Please help.
I appreciate your help.
Derrick

Comments

  • NuevolutionNuevolution Posts: 30subscriber Bronze Level Member
    --I am not an accountant--- But from my experience, I am a C corp in the state of California. What I do is a have a sub-chapter S filed with the IRS, which means, I only pay taxes on the total amount of profits which are done after I have deducted all expenses from the corporation, so let`s say if I made 48K a year, at the end of the year after I claim all expenses my total income was 10K that is all I pay taxes on. I think that is what my accountant told me, but if you are going to pay yourself, just get a FED ID number I think.. Check with a CPA or Accountant. This is on my experience.
  • NuevolutionNuevolution Posts: 30subscriber Bronze Level Member
    Chris,Call me I have more questions, Monday morning is always good for me, where are you at?
  • DerrickDerrick Posts: 2subscriber
    Chris,
    Thanks for the informaion.  So if I understand what you are saying correctly, I can take salary either way, profit distribution or salary, it will come out the same at the end of year?  I just want to make sure that if either way i choose, it is acceptable to the IRS. 
    Thanks,
    Derrick
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