A big part of the reason that many of us went into business was to make money for ourselves rather than have some other business owners pay our wages.

Unfortunately, as many entrepreneurs have learned this is a fine theory but often you’re the last one to get paid. And then, there are always important projects that should really to be funded within the company. While this type of spending is good in the long run for the stability and profitability of a company, it also has the possibility of cutting down on the business owner’s take-home pay.

So are there ways to balance the needs of the company against an owner’s wishes for a nice profit? Luckily, the answer is yes. But it still can take significant effort and plenty of paperwork to do things properly.

You may not be getting the 0actual salary as an owner, and neither are any partners, but there are still opportunities to make sure you’ and everyone else get properly paid.

• Get a draw. Sole proprietors who aren’t salaried employees don’t have to withhold any state or federal taxes. In these structures, an owner can take a distribution from the overall profits. This is referred to as a draw since it can reduce the overall capital. Owners of LLCs can also take a draw.
• Get a dividend. In case someone is an owner or a top executive and the business is a corporation, they can receive approval from the board of directors for payment. Business officers of a corporation who are actively involved in running the company also may be allowed to give themselves a salary.
• Learn taxes.  How you are paid is based to some degree on the tax structure of your business. Owners need to follow state and federal tax rules in what to deduct and what to pay, such as employment taxes. Generally, the amount of self-employment tax is based on overall profits. If you don’t make a profit in a year, no taxes are needed to be paid.

For more business strategies visit Simplicity Capital Finance.