Forums: Discussions for entrepreneurs and small business.

I have a few questions and am interested in hearing how others handle management of their businesses finances. My questions are-

With your LLC, how do you distribute profits, savings, etc?

Do you keep everything in a checking account? Savings? Multiple accounts? How much should you have in each account?

How do you pay yourself and how often?

How do you pay taxes? Does the business checking account pay it or do you pay out of a personal account?

These issues always confused me so I would like to know what others are doing.

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An LLC member is not an employee and typically will not get a paycheck. What most of my LLC clients do is to write themselves a 'distribution' check from the BUSINESS account at the end of each month based on case flow. Note - this is not an expense to the business.

Once the check is in their personal checking account, they take out about 25% and transfer that to a personal savings account. On 4/15, 6/15, 9/15 and 01/15 they send that money to the IRS (we do the same on a smaller scale for the state). The 'about 25%' is really dependent upon your own tax liability and may be more or less.