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Old 06-05-2017, 01:38 PM
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Join Date: Jun 2017
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W2 or Owner's Draw

How would a partnership make the transition from paying their two owners bi-weekly payroll and issuing them a W2, to pulling an owner's draw?

I have an LLC where the partners would run payroll for themselves bi-weekly not knowing that they are entitled to an owner's draw. So on the first day of Q2, they switched to taking a draw. I setup a draw account in our accounting software and am tracking the distributions, but my main concern is the estimated quarterly taxes. We are not withholding anything from the distributions, whereas we were in their bi-weekly paychecks; and since this started mid-year I am not sure if we should be making estimated quarterly payments to the IRS and state, or if I should just wait until we file 2017 taxes and then proceed.

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