Best way to pay yourself

Paying yourself must be "reasonable", per IRS guidelines.
If your LLC generates $100 000 profit on 100 000 miles with you as a driver, then paying yourself 50-60c per mile would very reasonable imo. Proportion-wise, I heard an opinion that 50:50 or even 40:60 is reasonable too. I guess it is all very arbitrary and really depends on the person who audits you.

However, if your business generates $100 000 profit on 100 000 miles with you as a driver, and you pay yourself only $20 000 on W-2 as wages and the rest you draw from dividends, then it is more than obvious that this is a sham.

 

I show zero income for first 3 quarters then pay myself once on the 4th quarter a yearly salary all at once. It makes taxes easy so I don’t pay anything quarterly just yearly. I only show maybe $35-40k as I don’t drive much it’s mostly my other drivers.

 

I pay myself .56/ mile.
Pay in taxes every month.
Someone has to help support that deadbeat… i mean that guy down the street with 6 kids who won’t works salary.

 

Hire a professional accountant. Tax mistakes can cost you a lot or cheat you out of your hard earned money.

 

Profit has nothing to do with what you pay. If you were to hire someone to do that job what would you pay them? That is the answer. You could make 500,000 K and still pay the same person .50 a mile. Just saying!

 

Pay yourself in Crypto currency.

 

Pay yourself like $1400 per week w2 and from there you can take distributions as needed. Your tax burden beyond the w2 should be from distributions.

 

Technically, you are right. You should show pretty much the same pay as if you hired someone else to do the job generating that profit for you...and that person would not be your slave.
I was more referring to a situation from my own angle. Even if the rates are high, I still have to run some miles to generate enough profit. If I show $200 000 profit I can't show only $20K in my own wages because it would always take more effort than paying someone $20K to make so much profit for me.

 

This is how I do it.