#RVABizLaw Tip of the Day: Three Ways for an “S” Corp. Owner to Take Money Out of the Company

Three Ways for an “S” Corp. Owner to Take Money Out of the Company:  (i) salary for services rendered; (ii) dividends; and (iii) loans.  Setting a “reasonable salary” for yourself that will withstand IRS scrutiny depends on a variety of facts and circumstances and is something you should discuss with your accountant.  Don’t get greedy by setting your salary too low to minimize employment withholding taxes.  As for loans from the company, be sure to document them with a promissory note and other documents as appropriate under the circumstances.  Have questions about the pros and cons of each method of pulling cash out of your “S” corporation?  Contact us anytime to discuss.