I formed my own company and invested about $3000 to start it up. I got into some personal financial troubles and had no choice but to dip into the company coffers. It is an S Corp and I am 100% owner with all investments. I feel guilty about it all around, but now that it's tax time (first time filing) I have to ask about the legal ramifications of my actions as well as how it will effect my bookkeeping/taxes. Embezzlement? Bad business practices?

Repayment of loan to start business

Salary

You can pay yourself money many ways, how you account for the payment will determine the taxes you owe on the money you took out

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Originally Posted by Fr_Chuck

Repayment of loan to start business

salary

you can pay yourself money many ways, how you account for the payment will determine the taxes you owe on the money you took out

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Awesome. Yes, that makes sense and answers another question of giving myself a "reasonable salary."

I guess I'll be honest on this first time around and put whatever I took out into the salary and wages category if my books.

Thanks for the input! It'll suck with taxes, but I'm learning...

Not embezzlement, you money. Treat it as salary and then pay taxes. Make it "profit sharing".

Exactly, you have only tapped into money that is 100% yours, you can say is income and pay the tax, or say it is a loan to yourself and then pay the company back whenever you can, without interest ;)