Single Member LLC & Paychecks

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invinceable

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Nov 14, 2008
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Just wondering what you guys do to keep your business and personal transactions separate, because I lately have found myself just using my business credit/debit cards for everything. I would assume it is best to keep them separate, like just give yourself a monthly salary or something?

Any thoughts?
 


Keep them separate. Makes it a lot easier to do the taxes. If you're ever audited there's nothing worse than trying to explain why all the personal stuff is on your business account. On the other hand, it's a great feeling to show everything is legit and you're done with the hassle.
 
Treat it like a company would treat you - set up monthly pay checks to yourself and do the withholding thing. Easiest way is to hire a payroll company for like $25 / mo to do it all + file your quarterlies and w2. I did that 2 years ago and haven't thought twice about it.
 
maximus said:
Treat it like a company would treat you - set up monthly pay checks to yourself and do the withholding thing. Easiest way is to hire a payroll company for like $25 / mo to do it all + file your quarterlies and w2. I did that 2 years ago and haven't thought twice about it.
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You don't get W2s as an LLC.

Unless you are classified as an LLC taxed as an S-Corp, everything is pass through and essentially self-employed income. It helps to separate them, but you still have to pay taxes on every dollar earned.

When you need money, take it from the business for personal use, or like said earlier, setup some type of 'salary' even though it isn't technically such.
 
i do the same exact thing...everything is charged to my business card...and i just use a service like mint.com to sort it all out at the end of the year.
 
ADP payroll FTW. ~$50 a month for 2 employees (my wife and I) and they handle EVERYTHING including all filings throughout the year with the state and federal, etc.
 
you don't need to put yourself on a payroll (IN MOST cases- I'm <thank god> not a CPA/tax attorney) rather just keep things segmented.

I'm assuming you're setup like 99% and are flow through. So it doesn't particularly matter how you do things. IE payroll or simply wiring/transferring yourself money to a personal account from your business account in whatever frequency/increments you want.

Just don't muddle the funds (ie - start deciding that it would just be easier to swipe the business debit card for everything rather than bother w/ that withdrawal into the personal account).
 
mberman84 said:
i do the same exact thing...everything is charged to my business card...and i just use a service like mint.com to sort it all out at the end of the year.
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If you have an LLC charging everything to the business will negate the legal protections provided by the LLC making it nothing more than a paperwork hassle.

If you are using an LLC and have not elected to be taxed as an S corp. Just write yourself a check or direct deposit funds from your business checking account to your personal account.
 
maximus said:
Treat it like a company would treat you - set up monthly pay checks to yourself and do the withholding thing. Easiest way is to hire a payroll company for like $25 / mo to do it all + file your quarterlies and w2. I did that 2 years ago and haven't thought twice about it.
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Any suggestions for a PayRoll company?
 
Use a business credit card.. That way you have access to all your transactions online for quick access. Mines go 2 years back online
 
I pay myself a salary of about 50% of my income through an actual payroll paycheck with taxes and everything (I use QuickBooks Online w/ Payroll for this), and the other 50% I just write myself a check for as a dividend (or use the Company debit card to make purchases and classify it as a dividend). Definitely ask your CPA for the best advice, but this is what I do and it works for me.
 
JoshTodd said:
I pay myself a salary of about 50% of my income through an actual payroll paycheck with taxes and everything (I use QuickBooks Online w/ Payroll for this), and the other 50% I just write myself a check for as a dividend (or use the Company debit card to make purchases and classify it as a dividend). Definitely ask your CPA for the best advice, but this is what I do and it works for me.
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Why would you need to use a paid service to give yourself a salary when you can simply do a transfer from your biz account to your personal for free?
 
invinceable said:
Any suggestions for a PayRoll company?
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You only need to do this if you're an S-Corp or your LLC is setup to pass through like an S-Corp. Then you have to pay yourself a "reasonable salary" for your position in the company and you legally need a payroll service to do this for you. This is how my CPA has explained it to me. I'm just a single member LLC right now, but because of the social security tax benefits, I'm thinking of moving over to an S-corp, paying myself a $50,000 a year salary and taking a bonus for the rest to save on the SS tax. Something like 15% I think.
 
Fiver said:
Why would you need to use a paid service to give yourself a salary when you can simply do a transfer from your biz account to your personal for free?
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You do this so when you do not pay extra taxes on X amount of your income at the end of the year. Then the IRS doesn't come sniffing all up in your shit at audit time because you have set everything up properly and w2ed yourself as much as an employee in your position would get to do what you do for a similar company. So basically you salary yourself so you do not have to pay a self employment/medicare/ss tax on ALL of your comapany's income at the end of the year...
 
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