How to pay yourself from your business

If you're a sole proprietor or single-member LLC

You don't pay yourself a salary. You take an owner's draw: move money from the business account to your personal one. The draw isn't an expense and doesn't reduce your taxable profit. You're taxed on the profit, however much of it you take out.

If you're an S corporation

You're usually an employee of your own company. You take a reasonable salary through payroll, with taxes withheld, and can take additional profit as distributions. What counts as reasonable is a question for your accountant.

Habits that keep the books clean

• Pay yourself by transfer, on a regular schedule, such as the 1st and 15th.
• Don't pay personal bills straight from the business account.
• Leave enough in the business for taxes and next month's bills before you transfer.

Clean draws or payroll make your books, and your tax return, much simpler. If you're not sure what structure you have, that's a good first question for the free review.