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.
Sound tax and accounting procedures are essential to growing a financially secure company. But multiple hiccups threaten the accuracy of these processes, elevating the risk of compliance penalties and reputational harm.