How to pay myself?

[Canopener Sally]

I'm a little confused about how to pay myself. I'm now up and running and want to pay myself biweekly. I'm a sole proprietor, for now. What is the best way to make sure my taxes and what not are taken care of? I read I shouldn't do payroll and that I'll be doing estimated quarterly taxes. This sounds yicky verses payroll, which sounds more simplistic (because services and software make it so).

Educate me. Please.

[sealymom]

I would definitely get a CPA. I met with several CPA's before I chose mine. That way, you don't have to stress yourself out about making sure your doing everything right as far as taxes and payroll go. I just feel like it's better safe than sorry when it comes to the IRS.

[petpalswi]

do you have employees?

I work alone. I am an LLC. we have a seperate checking account for the business. my husband takes care of our quarterly sales and use tax. I just take money out of my account for myself. we just calculate that as income when we do our yearly income tax. all that would change if I decided to have employees.

[elliesmom]

You really want to get a CPA. I take out a percentage of what I deposit every week and that goes into an savings account for paying quarterly taxes, sales tax , etc.

[kwpgrooming]

First get a CPA. Mine takes care of tax and payroll stuff. I pay myself and my husband a salary. My cpa takes all taxes and social security out. At the end of the year if there is any profit left over I give myself a bonus and my cpa takes taxes out of that. Makes it simple for us.

[holly paw-ly]

definitely talk to a cpa. i called mine yesterday with that same question. he says if i need money, do a "draw", write myself a check as needed, with proper documentation of course.
but don't go off my advice, each cpa may have a different suggestion.

[kats_melody]

Holly has it right. You are not an employee, you are an owner. You do not take a paycheck, you take a draw on your business capital. You will be liable for self-employment taxes on your draws. An accountant can help you with setting up your quarterly payments to the IRS.

My husband and I formed an LLC to run our business. We are considered to be member managers of the LLC, that is company management. If you have not formed an LLC, look into it, forming an LLC can protect your personal assets if your business is sued. It's dirt cheap to form one, we did it online in Florida for less than $200.

Laura

[Briarpatch]

Take about 35 percent of everything you bring in and put it into a savings account weekly to cover taxes. Talk to whomever does your taxes (or a CPA) to see what and how much you should be filing quarterly. Really, if the 35 percent is put away, you can spend whatever you want, just document. This was the best piece of advice I got when I started grooming. There was usually a bit left in the account after the taxes were deducted, but it kept me from not having enough to pay when necessary.