If you file taxes as a sole proprietor or a partnership, then your pay is an equity draw
If you take funds for a personal expense that is also an equity draw
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
Hey there, @nyspotlessllc.
I'll share with you the steps on how to handle a personal expense in a business account in QuickBooks Online (QBO).
When you use a business account to pay for a personal expense, you can record it in QuickBooks. After that, you can reimburse the company.
Here's how:
Step 1: Record a personal expense from a business account
Step 2: Reimburse the company
Please take note that it's not advisable to mix personal and business funds. It is much easier to keep track of business expenses for tax purposes if you use a separate business account instead.
For more info, please check out this article: Mixing business and personal funds.
Let me know if you need further assistance with this. I'm always around to provide answers and clarifications to your questions. Have a great day ahead and take care.
i'm asking as an LLC sole proprietor - as i file the business taxes on my 1040. so i want to take money as the owner ... i'm not planning to reimburse the company as you described. its owner's pay...am i missing something here? is it clear?
Thank you for clarifying, nyspotlessllc.
If you're a sole proprietor and want to get paid as the owner, you'll have to set up an owner's draw account. I'll guide you in doing this process:
To get paid, you'll just have to write a check from the owner's draw account. Here's how:
To learn more about this process, you can read this article: Set up and pay an owner's draw. With QuickBooks Online, you can set up owners or partners to track what they contribute to your business.
If I can be of any additional assistance, please don't hesitate to leave a comment below. I'll always have your back.
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