I own a single member LLC in Texas- I have two W-2 Employees (Me and my wife).
We have elected to be taxed as an S-Corp.
In order to make distributions to myself from my commercial account, what kind of paper trail do I need? My business and personal accounts are linked- can I simply transfer the funds over, keep records of the distributions, and report them at the end of the year?
Or do I need to file quarterly forms with the IRS keeping records of these distributions?
movemasters | Window Shopper |
5/25/2012 - 9:53 am
Hi BizResearcher
Never, never link your business and personal accounts. This is really a good
advice for every business. open separate account is the best option. This
keep's your business separate for yourself.
Thanx.
I'm 21 and im in the process of starting my own In-home non-medical health
care business in Michigan. I plan to grow larger with hopes to lease a small
office eventually. My business is a single member LLC, but im not quite sure
which type of corporation would be the wisest to file under. I've registered
my business name, created a thorough business plan and have also received
license but im not quite sure what steps to take next. Could someone possibly
assist me?
kmurray | Community Moderator |
4/26/2012 - 2:43 pm
Show Replied Text…
I'm 21 and im in the process of starting my own In-home non-medical health care business in Michigan. I plan to grow larger with hopes to lease a small office eventually. My business is a single member LLC, but im not quite sure which type of corporation would be the wisest to file under. I've registered my business name, created a thorough business plan and have also received license but im not quite sure what steps to take next. Could someone possibly assist me?
One approach that may be useful is talking to a mentor who could offer you specific guidance.
Another great resource is SCORE, one of SBA's resource partners. SCORE is a nonprofit association comprised of thousands of volunteer business counselors throughout the country. They are trained to serve as advisors and mentors to aspiring entrepreneurs and business owners (at no cost to you). You can find your local office or set up an online meeting to chat with someone about your questions.
Visit SBA Direct to find your local SBA resource partners by entering your zip code here: http://www.sba.gov/sba-direct.
Record the distributions to an equity account in your record keeping
system-label it Distributions. The distributions are not reported to IRS on
any quarterly forms. Make sure you are taking a reasonable salary...do NOT
take a low salary but lots of distributions. You are taxed on the net income
of the business, the distributions do not lower this.
My business account is able to make transfers to my personal because they are
at the same bank. The business account is still titled and owned by the
LLC... so don't let the other answers freak you out too much.
Record the distributions to an equity account in your record keeping system-label it Distributions. The distributions are not reported to IRS on any quarterly forms. Make sure you are taking a reasonable salary...do NOT take a low salary but lots of distributions. You are taxed on the net income of the business, the distributions do not lower this.
My business account is able to make transfers to my personal because they are at the same bank. The business account is still titled and owned by the LLC... so don't let the other answers freak you out too much.
What would happen if I have already cut a paycheck to myself and have
reported and payed the required taxes. I have payed myself as a regular
employee.
Never, never link your business and personal accounts. Doing so negates the value of having an LLC. You are actually operating like a sole proprietorship and you have opened the door to assumption of liability for the business. Your first step should be to open separate accounts. Then contact a bookkeeper or accountant and have them set up an accounting system for you. You may also want to talk to an attorney to find out if you can restore the integrity of the LLC or if you should dissolve it and start again.
movemasters | Window Shopper | 5/25/2012 - 9:53 am
Never, never link your business and personal accounts. This is really a good
advice for every business. open separate account is the best option. This
keep's your business separate for yourself.
Thanx.
kachi4u | Window Shopper | 5/25/2012 - 2:48 am
branden | Window Shopper | 4/26/2012 - 1:02 pm
care business in Michigan. I plan to grow larger with hopes to lease a small
office eventually. My business is a single member LLC, but im not quite sure
which type of corporation would be the wisest to file under. I've registered
my business name, created a thorough business plan and have also received
license but im not quite sure what steps to take next. Could someone possibly
assist me?
kmurray | Community Moderator | 4/26/2012 - 2:43 pm
AbilityBooks | Performer | 4/11/2012 - 9:06 pm
system-label it Distributions. The distributions are not reported to IRS on
any quarterly forms. Make sure you are taking a reasonable salary...do NOT
take a low salary but lots of distributions. You are taxed on the net income
of the business, the distributions do not lower this.
My business account is able to make transfers to my personal because they are
at the same bank. The business account is still titled and owned by the
LLC... so don't let the other answers freak you out too much.
wdonovan@donovanomc.com | Window Shopper | 4/13/2012 - 5:04 pm
reported and payed the required taxes. I have payed myself as a regular
employee.
lahatte | Window Shopper | 3/14/2012 - 1:00 am
BizResearcher | Window Shopper | 3/13/2012 - 1:52 pm
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