How do I pay myself/owner draw using direct deposit?

Hi @nadams1 , thank for posting in quickbooks community.

Easier pay the owner draw with transfer in bank account then recategorized the account to owner draw. If you need to re-categorize a transaction and move it to a different account, select Undo. This sends the transaction back to the For Review tab. For additional information here i give you article about setup owner draw account .

Glad to assist you.

Setting up yourself as vendor, recording the draw as a bill and paying it online will do the trick. - the online bill pay feature in quickbooks is powered by Melio

I tried setting up as a vendor with bill to pay but it says the vendor must be 1099. The owner is a non-1099. What is your work around with that?

A company's owner is paid through the owner's draw, Aprilalphasite. They don't have to be set up as a vendor. Let me explain.
 

An owner's draw is an account where the owner takes the money out of the business. 

You can check these articles for more information:

• Salary or draw: how to pay yourself as a business owner
• Set up and pay an owner's draw

As always, I suggest reaching out to your accountant on the best way to handle this.

Let us know if you have other concerns. We're just one post away. Take care!

Quickbooks is confusing its users on this topic. When you attempt to make a direct deposit payment to an owner, it specifically says something like "in order to comply with the law" direct deposit payments can only be made to independent contractors. Please clarify. This has always been ok up until now. What has changed?

Hello there, @rdmillerjr. I appreciate you for joining here.

When making a direct deposit payment to an owner, you'll need to set up an owner or partner as a vendor, as suggested by my colleagues above.

To guide you further, you can follow these steps:

1. Go to the Expenses menu.
2. Within the Vendors tab, select New Vendor.
3. Fill out the form. Once done, select Save.
    

Afterward, set up an equity account. 

1. Go to Accounting on the left panel.
2. Within the Chart of Accounts tab, click New.
3. From the Account Type drop-down arrow, select Equity.
4. From the Detail Type drop-down arrow, select Owner's Equity or Partner's Equity depending on your situation.
5. Then, click Save and Close.

Note: It would be best to get some help from your accountant for proper guidance and to ensure that what you've set up applies to your business. Also, it makes your data properly recorded and accurate. 

You can check these articles for more insights:

• Salary or draw: how to pay yourself as a business owner
• Add an owner or partner to your books

Know that you can always go back here if there's anything else you need. Take care and stay safe always.

Hello, 

I tried this and it worked only once. I got an email from Melio that they can deposit to personal accounts. That the online payments is only business to business. 

Any other suggestions to pay by direct deposit?

Hello, 

I tried this and it worked only once. I got an email from Melio that they can deposit to personal accounts. That the online payments is only business to business. 

Any other suggestions to pay by direct deposit?

I appreciate you for trying the above solution and providing details on Melio's emails, @aclanda.

I'll make sure you're able to pay for yourself through Direct Deposit (DD) in no time. Here are some other suggestions to accomplish this in QuickBooks Online.

The first suggestion is that you may subscribe to our Payroll Services and set up the owner as an employee. Ensure to exempt the necessary fields as you're an owner. 

Here's how: 

1. Go to our QBO Payroll Plan and Pricing. 
2. Choose a plan and click Select. 
3. Select Continue. 
4. Tap Check out and create or enter your old Intuit account. 
5. Complete the billing information and follow the onscreen instructions. 

Then, enter the company and employee bank information to pay via DD. Once set up, you can now create checks for yourself. Let me guide you how: 

1. Go to the Payroll menu, then choose Overview. 
2. Select Run payroll. 
3. Pick the employee's name and enter the necessary information. 
4. Review the payroll, then click Submit payroll.
5. Hit Finish Payroll.

For further details, visit this link: Create pay checks in online payroll.

Another suggestion is to search for a third-party app that can enable you to send a payment to your vendor through DD. Please visit our apps page: QuickBooks Apps Store. 

Feel free to check out these articles below to find answers to frequently asked questions about Online Bill Pay and DD in QuickBooks: 

• What is Online Bill Pay?
• Direct deposit FAQs

If you have other questions about features in QBO, then tag me in the comments below. I'll get back to you as soon as I can. Take care always, @aclanda.

An owner is NOT an employee, so running an owner draw check through Payroll--with related payroll tax withholdings--is not correct.  I'm in the middle of an IRS audit and this issue is causing me great problems.  QBO needs a mechanism to run a weekly/monthly non-taxable draw through the payroll function so it can be direct deposited without having payroll taxes applied.

I still haven't found an answer to this.  How can I pay myself an equity draw and have it be direct deposited?  

I’ve got you covered, @tratkinsii.
 
Please give me an opportunity to explain. You must be paid with an owner's draw instead of an employee paycheck if you're a sole proprietor.
 

An Automated Clearing House (ACH) payment is a method of transferring funds electronically. ACH payments can be used to move money from one account to another at the same bank or between two separate banks. 

ACH was designed to minimize the use of paper checks for recurring payments like bills and payroll.
 
If you haven't yet imported the transaction from your bank, the simplest approach to record a fund transfer in QuickBooks is to use Transfer. Here's how to make a money transfer record:

1. Select + New.
2. Select Transfer.
3. From the Transfer Funds From the dropdown list, select the bank account that the money is coming from.
4. From the Transfer Funds To dropdown list, select the bank account that the money is going to.
5. In the Transfer Amount field, enter the amount being transferred.
6. Edit the Date field.
7. Enter a description of the transfer in the Memo field (optional).
8. Select Save and close or Save and new to complete the transfer.
9. Select Yes if you double-checked the date.

You can find the recorded transfer by opening each account register in the Chart of Accounts.

Additionally, have this link to set up and pay owner’s draw. 

 
If you require further assistance from us, please return to this thread. We're standing by to help you. Have a good time.

Why is there still no correct answer on this?

Admins/employees: no one is asking how to account for owner pay.

We are asking how to actually send an electronic payment to a non-employee, non-1099 person.

Owner draw is not 1099 and should not be run through payroll. 

Greetings, @Kdoughty. 

Thanks for chiming in on this thread. It's great to see a new face here in the Community. 

At this time, there isn't a way to send an electronic payment to a non-employee. 

However, you can pay an owner's draw with a check. Here's a guide that can help you out: 

Set up and pay an owner's draw

If you have any other questions or concerns, don't hesitate to ask. Best wishes!