Just keep this in mind when making decisions - and it is always best to get professional advice from those in the know: A lawyer will have a much easier time piercing the veil of protection if you and your business structure comingle funds. Do it just once and that can offer the opening the opposing side seeks. Keeping them totally separate is difficult when you're a small business and absolutely worth it.
Really Stupid Question - Should I Pay Myself a Wage?
Discussion in 'Trucker Taxes and Truck Financing' started by Tez, Jul 28, 2011.
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If you'd like you can pay me the wage and solve your question too. Just kidding best thing is to consult a Lawyer and accountant, Good luck
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I don't know that there is lots and lots of extra work when it comes to being an owner operator or owning a corporation. There are greater responsibilities any time you own a business. There is a little more paperwork, but not too much. It may have sounded that way in my previous post. You can always hire a CPA to do most of the tax and filings for your corporation, if that is the way you want to go. Being an owner operator means that you will need to do a better job of checking your equipment or hire someone to do it for you. It will also require that you write a check for any maintenance or repairs.
With the increased responsibilities and liability of owning and operating a business come an opportunity to earn more money. There are always risks with everything that we do. Being in business means that you have the opportunity to succeed of fail. It is all up to you. Everything we do comes at a price. Buying a truck or starting a business is no guarantee of being successful. Both offer an opportunity. What you do with that opportunity is up to you.Pandemic Thanks this. -
A "S" Corporate structure provides most of the benefits of the "C" corp but your accounting can be done like a partnership. There is not as much of the "corporate book" responsibilities with an "S" either, but you still have to (and this has been said here before but it's worth repeating that it's VERY IMPORTANT) keep your accounts separate. Get professional advise!
G/MAN Thanks this. -
How do you keep your accounts seperate? If you have a business account and transfer money to your personal bank account to pay bills such a mortgage on home phone bill etc isn't that not keeping them seperate?
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Pay yourself a steady salary, or wage, or percentage, or however else you decide you want to pay yourself. Be consistent, and always use the same method. Anything other than a straight salary should probably have some sort of documentation specifying how you are paying yourself just in case any questions arise.
ONLY transfer the amount you personally are entitled to based upon the method you chose to pay yourself from your business account into your personal account.
For example, if you pay yourself a salary of $500/week, you can set it up so that the bank automatically transfers that $500 every week....hands off, you don't have to think about it.
If you pay yourself by the hour, you'll have to keep track of your hours worked and either write yourself a check or go to the bank and transfer the money you "earned" for the hours you worked. You'll have to keep a record of the hours you worked in order to prove that you personally earned that money as an employee.
If you pay yourself by percentage of the gross, you'll have to keep track of the revenues generated and then write a check or go to the bank and to transfer the percentage of the revenue you "earned" for the work you performed. You'll have to keep a record of the revenues and the amounts you paid to prove that you personally earned that money as an employee.
Main thing is to have a regular payday and keep any supporting documents to prove you were personally entitled to the money you paid yourself. In other words, if questions arise, you need to be able to show that any money which was transferred to your personal account was "earned" by the work you did. If you pay yourself random amounts at random times of the week/month, and do not document how/where/why that money was transferred from the business to your personal account, you aren't keeping them separate.
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