Four Main Ways to Receive Payments from Your LLC

Are you a business owner wondering how to receive payments from your LLC? Look no further! Here are four main ways you can get paid from your company:

1. Pay Yourself as a W-2 Employee: Treat yourself as an employee of your LLC and receive regular paychecks. This method allows you to pay yourself a reasonable salary and save on self-employment taxes.

2. Earn Profit Distributions: Receive payments through profit distributions or owner’s draws. This method is more common for LLC members and allows you to pass on business profits to yourself.

3. Pay Yourself as a 1099 Independent Contractor: While less common, you can pay yourself as an independent contractor instead of an employee. Keep in mind that you will still need to pay self-employment taxes on your income.

4. Keep the Money in the Business: If you prefer to reinvest earnings back into the business or build savings, you can choose not to give yourself a paycheck. Just remember that you will still need to pay income taxes on any profits generated by the business.

Whether you choose to pay yourself as an employee, through profit distributions, as an independent contractor, or keep the money in the business, it’s important to consider the tax implications and consult with a financial advisor if needed. Start managing your LLC payments effectively today!