How I Pay Myself as a Business Owner (And Why I Actually Love Tax Season 💗)
Welcome back to my little corner of the internet 💗
Amy here — typing away at the library because my internet hotspot totally gave up on me lol 😭
But honestly?
I kind of love it here.
I bring my wildberry tea from home (or grab a hot chocolate), settle in, and make it a whole vibe sesh.
It's become my little focus ritual and I highly recommend it. ☕
Anywho…
Today we're talking about one of my favorite topics:
👉 Taxes.
I know. I know.
Most people are NOT excited about that word lol.
But honestly? I genuinely am. 😭💗
And today I want to walk you through something that confused me early on as a business owner:
👉 How to actually pay yourself.
💸 Option 1: Owner's Draw
When I first started paying myself, I used what's called an owner's draw.
Here's what that means in simple terms:
👉 Your payments come directly from your company's profits.
Which also means:
👉 You're NOT paying quarterly self-employment taxes upfront.
Instead?
You pay everything when you file your personal tax return at the end of the year.
And here's the helpful part:
When you do file, the IRS gives you quarterly estimated tax payments you can make going forward.
Which honestly makes budgeting SO much easier once you know what to expect.
If you're in this season right now — an owner's draw can feel really flexible and simple.
Just make sure you're setting money aside throughout the year so tax time doesn't sneak up on you! 👀
📖 If you want to get smarter about deductions as a self-employed person, this book is a game-changer: 475 Tax Deductions for Small Businesses and Self-Employed Individuals 💗
💼 Option 2: Paying Yourself a W-2 Salary
More recently, my accountant advised me to switch to paying myself a W-2 salary instead.
And here's why that's kind of amazing:
👉 Your salary counts as a business expense.
Which can actually reduce your company's taxable income. 🙌
Since I handle payroll myself through our payroll company, I've found this method to feel SO much more organized.
Set salary. Automatic tax withholding. Clean records.
Honestly? It's been such a relief.
Important Disclaimer: I am NOT an accountant. Everything I share here is just my personal experience. Please talk to a qualified tax professional before making decisions about your own business. 💗
📖 This one's a must-read if you're navigating business taxes as an entrepreneur: Tax Savvy for Small Business by Stephen Fishman — named "Best Tax Book" by Entrepreneur Magazine 👏
🌿 Why Tax Season Actually Excites Me
I know that might sound wild lol.
But honestly?
Getting to file business taxes is a reminder of how far I've come.
It means:
My business is earning 💗
I'm building something real
I get to learn and grow every single year
And that genuinely fills me with gratitude. 😭
💬 Questions to Ask Yourself
Before you go, take a moment to reflect:
Is your business generating enough revenue to pay yourself yet?
Have you talked to an accountant about your personal AND business taxes?
Do you know your tax deadlines? (Put them in your calendar NOW — penalties are no fun 😅)
📚 Helpful Resources
Here are a few Amazon finds that have helped me (and that I think you'll love too):
📖 475 Tax Deductions for Small Businesses and Self-Employed Individuals — maximize every deduction
📖 Tax Savvy for Small Business by Stephen Fishman — named best tax book by Entrepreneur Magazine
📖 Taxes 101: An Essential Primer on the US Tax System — perfect if you're brand new to this
Thanks so much for stopping by 💗
Happy Tax Season, ya'll! 🙂
This post contains affiliate links. If you purchase through my links, I may earn a small commission at no extra cost to you — thank you so much for supporting Manifest Money with Amy! 💗
