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1071 points mtlynch | 4 comments | | HN request time: 0.746s | source
1. ein0p ◴[] No.39399519[source]
FYI: You can’t “not draw a salary” and get that profit out of the company. IRS mandates that you pay yourself a reasonable amount, and pay (eye watering amounts of) taxes on that amount. You can’t circumvent any of that by just taking everything as distributions.
replies(2): >>39399540 #>>39399630 #
2. mtlynch ◴[] No.39399540[source]
Are you sure you're not thinking about corporations?

TinyPilot is a single-member LLC, so all the income is on my personal tax returns.

When I said I don't draw a salary, it was to prevent confusion about whether payroll includes me.

3. tgtweak ◴[] No.39399630[source]
I don't think there were any insinuations that that was after-tax income in his personal bank account - just that the company earned that much in the previous year and it could be paid out (dividends or otherwise) after much in the way a gross salary would be.
replies(1): >>39399822 #
4. ein0p ◴[] No.39399822[source]
For single person LLC (as the OP said) it doesn’t make any difference - they’re paying all taxes on the entire amount and then just deducting business expenses. IOW their business account does not require any special treatment. For corps (including S corp) there’s often this temptation for the founders to pay themselves the bare minimum and skirt some of the taxes (social security for example). I was pointing out that this is a good way to draw unwanted attention.