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Originally Posted by Them Other Truckrz
We pay ourselves (team) $904 per month each, if we need extra income in our personal bank account we take a draw (seldom happens). Our Corporation owns and pasy for everything that has to do with trucking, by paying yourself(s) minimun salary you save a bit on payroll taxes. We also have a Trucking Tax Specialist that advises all our tax issues and takes care of quarterly payments etc.
Our Trucking business took in a gross of $250k IN '07, if we paid ourselves that the taxes would be ridiculous, don't pay yourself to little, but definitley don'y pay yourself to much, let the business support those need within the boundries.
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Now here's a reason to pay the costs associated with being incorporated. I'll guess it's a S corporation. As noted, don't pay yourself too little:
"As is the case for any other corporation, the FICA tax is imposed only with respect to employee wages and not on distributive shares of shareholders. Although FICA tax is not owed on distributive shares, the IRS and equivalent state revenue agencies may recategorize distributions paid to shareholder-employees as wages if shareholder-employees are not paid a reasonable wage for the services they perform in their positions within the company."
Pay yourself an amount that you can show would be an "average" for the industry. If recategorized, you'll probably owe additional taxes plus interest and penalties.
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