As a small business owner, there are many options for taking money out of your business to pay yourself. Individually and in combination these different methods may offer you some real advantages in terms of tax-savings and liquidity (having assets that can be readily converted into cash).
Deferred compensation (when a portion of your income is paid out at a date after the income was earned) may postpone your payment of taxes on that income. Income shifting (transferring some of your earnings to other family members to reduce your taxes), may also have financial benefits related to your estate, the wealth you’ll pass on to your family when you die.
Compensate yourself wisely.
Explore these options and advantages with your tax advisor.
Note: Consult with your tax advisor and perhaps a business attorney to determine the most advantageous and cost-effective ways to compensate yourself.
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