Do you pay yourself a salary?

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JBloggs

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Do you make a salary as owner/innkeeper at your B&B?
Not asking if you manage the finances for the business, but do you actually make a paycheck\salary?
 

EmptyNest

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We never did, in workshops I have attened in the past, the "experts" say that you should.I am sure it is for tax purposes etc.
 

gillumhouse

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I wish! I guess my salary is getting to live here,
 

muirford

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I do get a paycheck - it's pretty minimal - as an employee of the business, since we are set up as a sole proprietorship with DH as the owner. We did this when we first started as I was still doing my consulting job for the forseeable future. He doesn't take a salary - just the proceeds at the end of the year are his 'income'.
 

Breakfast Diva

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We created a sub S corporation. The corp. pays a monthly lease payment to us and also pays us a small salary. Setting it up this way enables us to save on taxes since we don't have to pay both the employer & employee payroll taxes on the lease payment. Yes, it will make our Social Security less in the future, but we're putting more money away now for retirement. Who knows if SS will be there when we need it in the future.
 

Samster

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I wish there was something that I could pay myself a salary. :-( That would certainly be my goal if the business were profitable.
 

YellowSocks

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Maybe?
Just before paying my mortgage I often transfer money from business to personal. I guess that would be a paycheck.
=)
Kk.
 

Morticia

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Maybe?
Just before paying my mortgage I often transfer money from business to personal. I guess that would be a paycheck.
=)
Kk..
Then you are paying SS, unemployment, FICA taxes, etc on this money, right? If not, it's not a salary.
 

muirford

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Maybe?
Just before paying my mortgage I often transfer money from business to personal. I guess that would be a paycheck.
=)
Kk..
Then you are paying SS, unemployment, FICA taxes, etc on this money, right? If not, it's not a salary.
.
That's the distinction. My paycheck gets all those things deducted as an employee; anything else is considered owner's draw against your equity in the business, which essentially gets reckoned as self-employment income at tax time. Then you pay the taxes on April 15.
 

JBloggs

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A salary is not using money from your business, I am asking about an actual salary/pay check not living off the business income. Specific question Do you pay yourself a salary?
 

Morticia

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A salary is not using money from your business, I am asking about an actual salary/pay check not living off the business income. Specific question Do you pay yourself a salary?.
I think you needed to be more specific about what you mean by 'salary.' Many sole proprietors don't think of taking money out of the cash box as a salary, but some do. Some think of the rent they don't pay as a salary, it's not. Or the food or utilities. Ditto, not a salary.
 

JBloggs

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Uh how much more specific can I be? >BEAT HEAD HERE<
Do you make a salary as owner/innkeeper at your B&B?
Not asking if you manage the finances for the business, but do you actually make a paycheck\salary?
 

Morticia

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Uh how much more specific can I be? >BEAT HEAD HERE<
Do you make a salary as owner/innkeeper at your B&B?
Not asking if you manage the finances for the business, but do you actually make a paycheck\salary?.
Joey Bloggs said:
Uh how much more specific can I be? >BEAT HEAD HERE<
Do you make a salary as owner/innkeeper at your B&B?
Not asking if you manage the finances for the business, but do you actually make a paycheck\salary?
You didn't define 'salary.' Like I said, some people don't think taking money out of the till is a salary and some do. For a sole proprietor, most think all the money is 'theirs' anyway.
It's the paying of the employment taxes that needed to be specified.
I bet there are a lot of people reading this right now who are thinking, 'But I just take $200 every week, I don't pay employment taxes on that, but I do PAY myself out of the proceeds of the business. That's a 'salary' isn't it?'
 

gillumhouse

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Uh how much more specific can I be? >BEAT HEAD HERE<
Do you make a salary as owner/innkeeper at your B&B?
Not asking if you manage the finances for the business, but do you actually make a paycheck\salary?.
No, I do not make a salary. My only checks are from the City & SS (bless them both).
 

SecondAct

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Joey, do you? So far, it looks like 7 people have responded that they do not take a salary, i.e., the kind that has payroll taxes deducted from it, though some may take "money" out of the business. Obviously, it does make a difference for your future SS; however, if you've already established your best 5 years from previously full-time employment and you're satisfied with that, then it doesn't really matter.
 

Sanctuary

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No; I still get the pleasure of paying dearly to slave here. :) I'm not really complaining, though. I love what I do - most of the time.
 

Breakfast Diva

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Joey, do you? So far, it looks like 7 people have responded that they do not take a salary, i.e., the kind that has payroll taxes deducted from it, though some may take "money" out of the business. Obviously, it does make a difference for your future SS; however, if you've already established your best 5 years from previously full-time employment and you're satisfied with that, then it doesn't really matter..
There are 2 so far who ARE taking a salary.
 

SecondAct

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Joey, do you? So far, it looks like 7 people have responded that they do not take a salary, i.e., the kind that has payroll taxes deducted from it, though some may take "money" out of the business. Obviously, it does make a difference for your future SS; however, if you've already established your best 5 years from previously full-time employment and you're satisfied with that, then it doesn't really matter..
There are 2 so far who ARE taking a salary.
.
'scuse me, you are correct. Two taking salaries, though may be small. And, can you explain to my non-accounting-brain what the benefit of that is?
 

JBloggs

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SecondAct it has nothing to do with me.
Just as an FYI to FORUM MEMBERS when I start a subject it is not about me, like the thread "what one thing will you do this year to bring in guests" there are plenty who are struggling to make ends meet and this is for the benefit of anyone who reads the forum. Just for clarification. Unless I mention "my business" specifically in the title/question.
 
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