Paying Self - Posted by Tom_MI

Posted by JeffM on March 12, 2002 at 14:37:49:

I have a similar situation, only I own the company, in partnership with my wife. My accountant has explained it to me this way. A partnership does not pay taxes on it’s own, all proceeds simply pass to the individual via a partnership tax return (I think it is called a K-1, but I am not sure). In this way, all business expenses are written out of the Partnership checkbook, and whatever is left over becomes “pass thru” income to the owner. All that I do, to keep the audit trail straight, is write a check from the partnership to me as a"Distribution". Just be sure to pay your business expenses out of your business, and your personal expenses out of your personal account. Hope this helps.

Paying Self - Posted by Tom_MI

Posted by Tom_MI on March 08, 2002 at 11:37:38:

I work for my parents framing company and receive a 1099. I also have a corporation set up for my building company and another for our new investment company. Here’s the question: Everyone says I need to put all the money from my current job with my parents into my business account. The problem I see with this is if they write the checks to my business and then my business writes me a check back so I can pay my personal bills my company would have to carry workmans comp on me. This would be alright except for things are slow right now so it would be hard to carry the extra expense. Am I being misguided here or should I get things running right?