how do I take a paycheck

by richard
(Clinton, ct, usa)

I own a LLC with my sister, I need to know how to take a paycheck and what forms are need and/or records to be kept.

Answer

As owner of the LLC, you are entitled to take distributions of the LLC's profits.

In fact, it is a good idea to withdraw your LLC's profits, as you will be taxed on them irregardless of whether you leave the money in the LLC or take a distribution.

The process for taking a distribution of profits from your LLC is very simple: You write a check from the LLC to yourself.

That's all there is to it.

This is much different from taking a "paycheck", in the sense of withholding payroll taxes and so forth.

As the owner of the LLC, you will pay "payroll" taxes (though they are called self-employment taxes in the context of being an LLC owner). You will file Form 1040 SE when you file your personal taxes at the end of the year with the rest of the personal tax return.

Be sure also to look at IRS Form 1040 ES, which covers the estimated taxes you might be liable for each quarter.