This ad will close in
Question added to topic MoneyAugust 21, 2007

How do we determine how much money we can take out of our company while we are paying off loans?

I am part owner of a gift shop with 4 other women. We have some debt but are paying more than the minimum requirment. Four out of five of us believe we should be allowed to take money out but one feels we shouldn't until our debt is paid.
You need to understand that you will be taxed on profits. Repayment of loans amounts is not a tax deductible expense - only the interest portion is. You should be working closely with a financial advisor and tax consultant to determine the appropriate amounts of money to be drawing from the business and then determining whether it is through payroll or owner draws - they have different tax considerations.
Pam Newman is a Certified Management Accountant, author and Certified QuickBooks ProAdvisor for Financial and Point-of-Sale software. She is also president of RPPC, Inc., which provides customized business development services.

0 Comments. Post Yours.

About ASK ENTREPRENEUR

Ask Entrepreneur is a question-and-answer forum for and by the Entrepreneur.com community. Send in your burning business question, or comment on someone else's now. Have a Question? Ask Now

Topics (over 1000+ answers)

Don’t see a topic? Suggest One

Ask Entrepreneur Q&A Hangouts

Google + Hangout With Shark Tank
Google + Hangout With Jason Falls
Google + Hangout With Angela Jia Kim
Google + Hangout With Grant Cardone