Best way to pay yourself

Again, in terms of whether you want to be in cash [anticipating DEFLATION] or in real property [anticipating INFLATION], here's another piece in the news arguing for holding onto that cash for the time being:

Blackstone’s $69 Billion Real Estate Fund Hits Redemption Limit

Blackstone’s $69 Billion Real Estate Fund Hits Redemption Limit


Blackstone Inc.’s $69 billion real estate fund for wealthy individuals said it will limit redemption requests, one of the most dramatic signs of a pullback at a top profit driver for the firm and a chilling indicator for the property industry. Blackstone Real Estate Income Trust Inc. has been facing withdrawal requests exceeding its quarterly limit, a major test for the one of the private equity firm’s most ambitious efforts to reach individual investors. The news, in a letter Thursday, sent Blackstone stock falling as much as 10%, the biggest drop since March. In the past year, rich individuals, family offices and financial advisers have become more cautious about tying up money in assets that are hard to trade and value. At UBS Group AG, some advisers have been reducing exposure to BREIT. A major chunk of redemptions for the fund has come out of Asia this year, said a person familiar with the matter who asked not to be identified citing private information...

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"Not to be confused with BlackRock Inc, an investment management firm."

Blackstone Inc. - Wikipedia.

 

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The whole point of filing as an S Corp is to avoid the 15% self employment tax. You pay yourself a reasonable salary which incurs the self employment tax and take the rest as a distribution which does not incur the self employment tax.

 

You do NOT have to be an employee of your LLC/S-Corporation.

The IRS used to have a really nice publication describing employees in detail; from memory, these were some of the IRS examples:

But as far as I can tell, the IRS is no longer being so helpful, obviously because the IRS wants as many people as possible to be classified as employees, so that the IRS can maximize the taxes which people pay.

Furthermore, from what I can tell, the entire legal/legalistic situation [Employee or not an Employee] is a complete disaster right now [and it varies wildly from state to state - it didn't use to be like that].

But, again, you do NOT have to be an employee of your LLC/S-Corporation.

In fact, if you are an "employee", then you probably shouldn't have created an LLC/S-Corp in the first place.

Also, here's a big psychological roadblock which it helps to hurdle, and that is to ask yourself the following question:

Do you own the money in your LLC/S-Corporation?

If you're of the psychological mindset that the money in your LLC/S-Corporation belongs to you, then you don't understand the LLC/S-Corporation concept at a very basic & primitive level.

You do NOT own the money in your LLC/S-Corporation.

Your LLC/S-Corporation owns that money.

And until you start looking at it from the point of view of the abstract business entity, you're gonna be stuck in a form of dumb-think which will prevent you from getting ahead in life.

If you're looking at your LLC/S-Corporation as just one giant piggy bank [which you can raid to finance your private life whenever the fancy strikes you], then you're going about it all wrong, and you could get in a lot of trouble with the IRS.

 

Beating a dead horse here, but the question continues to be: Are we going to keep experiencing long term IN-flation, or are we on the cusp of the situation inverting itself, and suddenly we're about to experience long term DE-flation?

[Remember, in inflationary times, you want your business to have stockpiled physical stuff, such as spare parts & tools & commercial real estate and whatnot, whereas in deflationary times, you want to be sitting on cold hard cash. Cash loses its value during inflation, but cash gains value during deflation.]

Personally, I don't know what's going to happen, and I doubt that anyone this side of Klaus Schwab and Bill Gates and Lord Rothschild knows how events will ultimately unfold.

But lately I've been seeing a lot of stories which would indicate that there could be a great deal of DE-flation in the near future.

Here are two of those stories:

If we're going to have continued inflation, then you want to purchase that used sleeper cab right now, while it's $15,000, before the price increases to $20,000.

Conversely, if we're going to have deflation, then you want to hold onto your money, and wait patiently until that $20,000 sleeper cab comes back down to $15,000.

Again, I don't know what's going to happen, but as an OWNER of a business, you have to be thinking constantly about strategies for surviving both inflation and deflation.

And sometimes you just gotta suck it up, grit your teeth, roll the dice, and hope that you made the correct analysis of the situation.

 

I would not worry about deflation.
It is almost unheard of with fiat money.
Especially that the government is running on perpetual deficit and they need to raise debt ceiling again.
But inflation is slowing down. It is estimated to fall below 3.5% by the end of the year.
New Truck and trailer prices, however, may not be too keen to follow the pattern but used equipment pricing is sliding, the more cheap freight, the quicker it will.
I would wait at least a few good months to see where used Cascadia prices are going to fall.

 

No need to overthink it all. The Government isn’t going to look at your checkbook, cashed checks, personal spending practices. A One Truck Operation really is that important. Everyone has their way I guess. Personally, I take draws as needed to cover personal living expenses. It’s never a set amount. It may go up or down, depending on my needs. I take just enough to live on. Hopefully there’s a bit left over and above the costs of operating. No W2, no 1099’s. At the end of the year, it’s simple math. Gross minus costs. The accountant then does her magic with the numbers. Dividends, Schedule K, Profit and Loss. I don’t understand it. That’s why I don’t do my own taxes. I don’t pay quarterly estimated taxes at all. I rarely owe more than $800 to my State. Depending on current tax laws, I rarely owe the Feds. Sometimes I actually get a refund. Usually enough from the Feds to pay my State. I’ve had my returns picked for audit twice in the last 27 years. Each time mistakes were found. Once in my favor, other time not so Lucky. It cost me some money. Boiled down to a $1500 mistake made by my Accountant. It was because of the Government’s own tax credit form. I couldn’t fault my Accountant. They got me for interest, and penalties. Interest wasn’t much. Penalties were high. 11 months worth, along with added 11 mo.s worth, because I don’t prepay quarterly. Total owed was $4000. That hurt. Makes a good argument for prepaying estimated quarterly taxes. They actually had a forgiveness law passed because of the faulty info on the form. However to apply, you must pay the IRS in full first. I never bothered applying afterwards. Just wanted to be done with it. Bad Business, I know. But my choice.