The Rules of Paying Yourself a Bonus, Part 4
Grow Your Business, Not Your Inbox
In some instances, a business may be organized as either the combination of:
- A Limited Partnership and a C Corporation
- An LLC and a C Corporation
The Limited Partnership mentioned above can compensate its partners, and the LLC can compensate its members. The C Corporation under either scenario above can be compensated using distributions of profit. Individual partners in the Limited Partnership and C Corporation scenario and members in the LLC and C Corporation scenario may be compensated using guaranteed payments. The C Corporation can be compensated using consulting and management fees.
Finally, be certain to reimburse yourself for any expenses your business owes you for any out-of-pocket expenditures you've incurred to date. These reimbursements create tax deductions for your business and allow you to receive these reimbursement dollars tax-free.
Source: "Taking Profits Legally--and With Minimal Tax Impact"