[denisematrix]

How does a business owner get paid? Small construction company as an LLC multimember. Can a check be written as an expense?

[Just Looking]

One of the interesting things about LLC's is that there are different options.

In the case of a multi-member LLC, the LLC is usually treated as a partnership and is taxed as such. Amounts paid to partners for their work are classified as a guaranteed payment and are expensed to an account with a name such as Guaranteed Payments. These payments (which resemble wages, but nothing is withheld in the way of payroll taxes) are deducted as business expenses on the partnership tax return. The amounts paid to owners are reported on a K-1, as are the owner's proportionate share of income/loss. The owner will pay self-employment and income taxes on his 1040.

Guaranteed payment is a specific term in the Internal Revenue Code, which is defined as payments to a partner in his or her partner capacity for services or the use of capital if determined without regard to the income of the partnership. If you are asking about paying the owner profits (versus a guaranteed payment as discussed previously), the deductions would be classified as draws.

It can become more complicated because an LLC can elect to be treated as a Sub-S or C corporation. Since you don't mention this, I am just responding to the LLC as a partnership treatment.