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Old 12-05-2014, 04:53 PM
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sole member & drawing

I made LLC in 2014 and I am a sole member.
My LLC has loss so far, but I have drew some money like salary.
I have worked alone for my company, and I don't have any employees.
So far, I recorded this amount as drawings.

How I treat this money in 2014 tax return ?
Do I have to issue 1099 for myself? or
Should not I withdraw money because my company has loss?



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Old 12-06-2014, 02:37 PM
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My LLC has loss so far, but I have drew some money like salary.
I have worked alone for my company, and I don't have any employees.
So far, I recorded this amount as drawings. =====>>>>as you’re a one-member LLC, the IRS will treat your company the same as a sole proprietorship for tax purposes. when you want to take money from the company, it will be in the form of an owner’s draw;it is as simple as writing a check from the company to yourself and depositing it in your personal account, which should be kept separate from your business accounts. If you put your own money into the smllc, you can draw it out to pay yourself back in the form of salary. If you don't have any money in your capital account, you can't draw any money out for personal expenses (UNLESS you carry your own personal equity). For example, if you start a new business and you have little income and lots of biz expenses that must be paid out - for rent, equipment, interest on your business loan - there is nothing left to pay you for personal expenses.then no draw from the acct. as a sole owner of smllc, you cannot be paid a salary from the biz when the LLC is taxed as a sole proprietorship under default rules of the irs. Instead, the IRS treats the biz’s entire profit as income for you, even if you reserve some of the profit for thebiz’s working capital. So, Rather than take a regular salary, you can draw funds from the company for your own personal use if accounted accurately.

How I treat this money in 2014 tax return ?=========>>>>>as said, unless you earn taxable income from your smllc, You both personally and business don't get taxed on the money you draw out for personal use. Your business tax amount is determined by the net income on the Sch C / SE you complete each year. That Sch C/SE income is put into your personal 1040 tax return and is taxed along with other sources of income. For example, your monthly profits average $3k, and annual net income of the business reported on Sch C is $36k, and say you take a draw each month, and all draws total $30k for the year.your income of $36k is calculated on Sch C/SE and your net income on Sch C is included in your personal tax return.So aslongaas you take a loss, you have nothing to report on Sch C unless you report your biz NOL on your return.


Do I have to issue 1099 for myself? Or=====>>>>>no;your business receives1099s only if the business is paid more than $600 during the year by another business; Since you as a biz owner do not do business with yourself, no 1099 is required.


Should not I withdraw money because my company has loss?=========>>>>>> as said unless youhave owner’s equity in your acct(even if yur buisness takes a loss), you can not draw



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Old 12-07-2014, 12:22 AM
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thank you

Thanks so much.
It is very clear.



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