Are you a business owner and ready to pay yourself? Jarell goes over two ways to do just that.

You can:

1. Pay yourself through an Owner's Draw (also called a distribution), or

2. Pay yourself as an employee

But what is the difference?

An owner's draw means you are taking money from the business account and taking it for personal use. Owners draws are taxable as part of your personal income tax return, so be sure to consult with a CPA to make sure they are captured correctly on your return.

If you pay yourself as an employee, you are taking wages as a part of payroll just like any other employee. When you are paid as an employee, the company pays payroll taxes and withholds income taxes on your wages.

Now, what makes the most sense for your business?

This is all based on your entity type. You are likely a
Sole Proprietorship
Singlemember LLC
Multimember LLC
S corporation
C corporation, Partnership
Cooperative.

If you are unsure, we recommend reaching out to your CPA to determine your business entity and the best way to pay yourself.

To learn more about payroll and staying compliant, check out these articles:

[READ] The Different Ways Business Owners Can Pay Themselves
https://goo.gl/hJNRv9

[WATCH] How to calculate a paycheck    • How to Calculate a Paycheck for Your ...  

[WATCH] Gross pay vs. net pay
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