You own an LLC, and it's finally making money. As an owner, you want to take some out. The way you receive disbursements from your LLC depends upon the business structure you chose when you became an LLC. A Single-Member LLC typically operates as a Sole Proprietor, while a Multi-Member LLC usually is a partnership. However, either can choose to be taxed as a corporation by filing Form 8832 or Form 2553 with the Internal Revenue Service. The choice is yours, and your choice determines how you can get your money out.
Taking Money from Your LLC
Write your check in the net dollar amount you want, if your Single-Member LLC is taxed as a Sole Proprietor or if your Multi-Member LLC is taxed as a Partnership. These checks are considered "Draws" from your company, and are not subject to tax withholding. If, however, these payments from your partnership LLC must be considered guaranteed payments, they require special treatment.
Process a payroll check for your reasonable compensation, if your Single-Member LLC or your Multi-Member LLC is taxed as a corporation. These checks are subject to tax withholding as an employee. As long as you have basis in your LLC, you may also take some money out as dividend distributions. Make sure such distributions do not exceed an appropriate percentage of total monies withdrawn.
Calculate expense reimbursements for out-of-pocket business expenses or business mileage and write yourself the reimbursement check. These are not considered draws or payroll checks as long as they are for legitimate business expenses. Maintain the receipts or mileage logs for these expenses to substantiate them for income tax, and other legitimate, purposes.