LLC: How to Pay Yourself || how to pay yourself from your LLC, salary vs distributions, tax status

Are you ready to pay yourself as the owner of an LLC? In this video I share the different ways you can pay yourself from your Limited Liability Company, depending on the tax status of your LLC (sole proprietor, partnership, or S Corporation).

00:00 Intro
00:09 Tax status of your LLC
01:09 If LLC is taxed as sole prop or partnership
08:07 If LLC is taxed as an S corp
15:12 Most important take-aways

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Legal Disclosure: I am licensed to practice in the state of California and before the United States Patent and Trademark Office. Information contained in this video is not legal advice – please seek advice of counsel. This video and description may contain attorney advertising.

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#llc #limitedliabilitycompany

[braintweak]

Also, a video on Payroll services would be awesome. I already trust your word 100% more than any other videos I have found on Youtube.

[JoaquinCamarasaDMVareaRealtor]

Just discovered you at 1am in Birmigham Alabama, currently doing a road trip with my mom. You are amazing!
I set up my LLC and just filed 2553 for S corp tax election following your other video. An example on how to run payroll as another subscriber said before it would be wonderful. It is my first time using any of those services and it would make life much easier.

[qznbfhl]

Great videos! I appreciate the candor and knowledge. Thank you!😊

[HopKillerBrewery]

Could you please make a “How to create an LLC in 2023” please? Love all of your videos, I don’t own a business currently but plan to finally formalize it come the new year.

Love seeing your video quality improve and getting the subscriber count you deserve! You’ve got my business in the future as a Californian as well!

[juankyf]

Great video! Please make a video on capital gains tax within an LLC/S Corp

[_SYDNA_]

I need a video on: "How to feed your LLC without breaking separation." Why is no one making that?

If I have a photograpy business, do I contribute the cameras to the LLC and can I still use them for personal use at Christmas? Does that break the veil? If I buy new equipment does it have to be owned by the LLC? Should I care? Does it need to be listed as some kind of contribution if I bring it into a new LLC or use it in a new LLC? If I sometimes use equipment for personal things can I still write it off on taxes? Or, conversely, if I ty to conceptually hold equip out as owned by me as tools-I-bring-to-work can I still deduct the cost of new equipment somewhere. Sorry, I hope that makes sense. .

I had an attorney tell me that LLC's are meaningless to a sole proprietor because an atty would sue both me and the LLC should there be a problem. Considering that advice right now, but I'm still wanting to understand and do this properly in the belief that it helps me stay out of trouble, and that treating your business as a separate entity that must account for itself keeps us focused on creating robust, viable businesses.


Thanks for any thoughts you might have on this question.

[wyattsmith]

I do my personal banking and business banking at the same bank. So around the first of every month I just transfer money from the business to my personal account. In the future would it be better to write myself a check then? Thank you so much for all the info on your channel.

[melisaryun]

I second your opinion. Gusto is a great payroll service!

[TeresaKile]

I just converted my LLC to be taxed as an S Corp and I am soaking up everything I can read, but I'm starting to feel like I'm in over my head. So your videos are very helpful for me! Right now I am having an issue with the "reasonable salary". I went to the recommended webistes to get my that amount. The problem is that paying myself even the low end of the reasonable salary doesn't leave enough money in the business to pay for business expenses. I know I can't pay them out of my personal account, so what is the proper way to handle that?

[benjaminmahon]

Hello, I had a question that no one seems to be able to answer for me. If I have an "employer" 401K that I set up for myself as a sole proprietor of my business (using the EIN associated with that entity... me, the sole proprietor), but then I transitioned to become an LLC, and I am opening up a different 401K with a different custodian, do I use the old EIN for the new 401K or the new EIN associated with the LLC, for the formation of the new 401K?
Many thanks for all that you do!

[donaldlawrence]

My wife and I are just forming an llc for a travel agency-an additional retirement income generator hopefully. I don't expect to see a profit for several months. I believe we are able to tax as a proprietorship instead of a partnership. How could we tax as an s-corporation in this situation since there would be nothing to pay a salary from, initially?

[rodhester]

What if you are using your money for equipment etc. So you are taking money out of your personal account to purchase business equipment. Do you put that money in your business account and then spend it?

[MeleE]

I have an S Corp. Having trouble finding a good tax accountant here in CA. Is it really important to have one as an S Corp if I run payroll with one of the major companies and use Quickbooks for bookkeeping?

[YLopez-ncus]

Great videos. Do you recommend Uber drivers to open an LLC? If so, what’s the advantage.

[purplebutterfly]

Hi. I have new a business LLC Sole Member and am funding my business right now via (member contribution) deposits to my LLC account through my personal account with a check. I would like to know if I could transfer funds from that same personal account as a (member contribution) and not break the vail. I ask because it would be much easier to indicate on the transfer of funds (member contribution) vs. having to go to the bank often. Thank you.

[isb]

Thank you for this video, I have a question if you are an LLC taxed as a s-corp for tax purposes and you pay yourself a salary but also wants to give your self a distribution how does the IRS know that you are giving your self a distribution so you are not taxed on that money?

[jenniferclaudel]

how do you pay yourself if you are a Professional Corp (licensed) but with husb/wife officers

[dross]

If I don't take any owner distributions from my LLC and just keep it in the business checking, do I still pay self employment tax on that income?

[Shirl-sdtrendz]

You were amazing Elizabeth, thank you so much. Your advice helped point me in the right direction!

[ambragcute]

I saw some where that how you set up your distribution and the language of you operating agreement can stop creditors from getting your money… what terminology would I use to look further into that scenario?❤