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Jan 25, 2022
2:52:46pm
Beggar Truly Addicted User
Question for you small business owners
Do you pay yourself a salary or do you take periodic distributions/dividends? What do you find is optimal for tax purposes?

My wife runs a small business (fewer than 5 employees) that we worked really hard for a year and a half or so to get off the ground. Then, in the past 3 months, it's really taken off (99% thanks to her hard work and brilliance). During all that time we have just paid her a very small salary and reinvested the rest of the profits back into the business. At this point we are starting to see a lot more income than we need to reinvest into ads and other costs etc.

Is it better to increase her salary if we want to see more of that money or keep it low and take distributions from time to time? I know there are a lot of factors that go into the decision but curious what others here do that own small businesses.
Beggar
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Eastside
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Beggar
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May 3, 2001
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Apr 23, 2024
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