How to pay yourself for a C2C role?

How do you pay yourself? How much do you pay yourself? I have a partnership with my wife, the only gig through my LLC is 1 C2C software dev role that pays $100/hr.
6 Replies
afraid-scarlet3mo ago
Is it set up as an S Corp?
Inocelda3mo ago
Your LLC needs a business checking account and the client would make payments into that account. You then transfer money from the business account into your personal account when you pay yourself. As for how much to pay yourself, talk to your CPA about that. For example, if you're setup as a single-member LLC that is a disregarded entity then you would pay yourself 100% of the pay and you pay taxes on it as usual. If you elect S Corp tax status for your single-member LLC then you can get more creative. Long story short, ask your CPA on what's best for your personal situation. Oh you said partnership with your wife so guess you have 2 members. You can still do the disregarded entity route or corporation but you also the 3rd option as partnership. Anyone with high income (like over 200k probably) should hire a CPA.
quickest-silver3mo ago
It is a husband wife partnership LLC right now. I thought electing for S corp deadline was end of march? Is that still an option? What is the typical cost of a CPA assuming there's no more complications?
Inocelda3mo ago
Considering how much more the CPA will save you in taxes, they generally pay for themselves so cost isn't a concern imo.
Jinsaku3mo ago
It's not quite this simple. You have to process payroll, which is best using a 3rd party (for example, my CPA does this for me). For $50 each time I process payroll (once a quarter), they do all the paperwork, withholdings, etc. can't just disperse funds and call it payroll. From my experience, if you elect S-Corp at any time during the year it's retroactive for the whole year. This info is probably 5 years old, but I wouldn't expect it to be different nowadays. My CPA costs me about $2K-$3K a year or so between filing business and personal taxes as well as processing my payroll. Mid-sized firm (20-30 employees).
kuth3mo ago
I do owners draw. Am in an LLC partner ship.
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