Are you a small business owner, self-employed, sole proprietor, or LLC? Want to know the best way to pay yourself? We’re here to help with some simple tips!
Tip #1: Always have separate bank accounts for business and personal.
Tip #2: If you are a Sole Proprietor, transfer the money you need from the business account to the personal account and be sure to label the transfer as “Owner’s Draw.” This label helps your bookkeeper (like us here at EVA!) and tax preparer easily identify the transaction.
Tip #3: Talk to your CPA about the benefits of an S Corp entity setup and paying yourself as an employee.
Fun fact: Keeping the money in your business account versus your personal account doesn’t keep you from paying taxes. You’ll pay taxes on both your business and personal earnings combined depending on your entity setup and various tax factors.
Need help? Call us at EVA Business Solutions so we an help you with all your bookkeeping needs!