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Join nowTech services and consulting firm with five members. We're setup as a multi-member LLC in Georgia.
The money we're paid by customers is largely for hourly services delivered by our members. Example, a member adds a feature to a website for the customer. The time to deliver that feature is billed at a predetermined rate.
How should we reimburse the member for their time billed? As:
Thanks in advance.
Happy Friday, @tdhimes.
Nice to have you in Community.
For the best advice, I recommend reaching out to your accountant on how to record this in QuickBooks. However, you could check in on setting up and paying an owner's draw.
An owner's draw account is an equity account used by QuickBooks to track withdraws of the company's assets to pay an owner.
To do this:
For more details, check out: Set up and pay Owner's draw.
Feel free to reach back out if you have further questions. I'm always happy to help out. Have a great weekend!
for taxes you are a partnership, and as such should have registered with the state and the IRS to get the partnership FEIN, and have a written signed partnership agreement. Guaranteed payments must be specified in the partnership agreement and stated as so much per month to someone, if it is then you pay the amount regardless of how much they work and that is an expense for the partnership.
Partners take draws when they wish from their equity, they are not paid back as such.
The partnership makes money, when you fill out the form 1065 for the IRS, that form generates a K-1 per partner that shows his share of all income and expense per the written partnership agreement. The net income is his share and his earnings for taxes. then you move that amount out of retained earnings and into his equity account.
For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), I recommend you have the following for owner/partner equity accounts (one set for each partner if a partnership)
[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here
tdhimes did you ever develop a solution to this issue? I recognize this thread is a year old but we have a similar situation: we need to allocate a member's hourly contributions to specific jobs, rather than just entering a lump-sum "guaranteed payment" expense. Obviously, without such cost tracking we have no idea what has been invested in a given job.
Also looking for solution! Anyone?
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