As an owner of an LLC should I put myself on payroll?

We have put ourselves on payroll as 25% owners of an LLC we are getting hit with big Federal bills on our payroll. Should we remove ourselves from the payroll? Is it required to be on the payroll as an owner of an LLC?

Answer

Unless your LLC is taxed as a corporation, you should NOT be on the payroll as a W-2 employee.

Instead, you should take profit draws or guaranteed payments from the LLC, and make quarterly estimated payments on your income tax and self-employment tax.