I'm A Business Owner: How Should I Pay Myself?

Explore how US business owners pay themselves across common entity types, including sole proprietorships, LLCs, partnerships, and C or S corporations, with notes on tax returns and self-employment tax.

Learn how a sole proprietorship operates with one owner, optional local licenses, how draws fund personal use, and net income is taxed on Schedule C with self-employment tax.

Learn how a single member LLC is taxed like a sole proprietor and how profits pass to the owner's tax return, with the option to elect corporate taxation.

Examine how partnerships form and how general partners are paid through guaranteed payments, distributive shares, and distributions over basis; understand their tax implications via Schedule K-1 and Form 1040.

Explain the multi-member LLC form, state-level recognition, and liability protection, plus tax treatment as a partnership, required 10 65 and K-1 filings, with the option to elect corporate taxation.

Understand how an S corporation pays owners: a salary plus a distributive share, with income passing to personal returns via W-2 and Schedule K-1, and basis determining taxability.

Explore the C corporation structure, its double taxation, and how owners pay themselves through salary and dividends, with payroll and dividend tax implications.