Personal withdrawal

[Suba]

Personal withdrawals, also known as owner's draws or Draws, are withdrawals made by business owners in the form of money or business/company assets for personal interests. Even though a personal withdrawal will reduce cash balances or merchandise inventory, it will not be recorded as an expense, but it will reduce business capital and cannot reduce business income tax. So as a business owner, do you receive a decent salary so you don't need to make personal withdrawals?

 

[Sanjeev]

I am not a business owner. I think by withdrawing money the business money reduces but still it's a requirement for a business owner.

 

[Xtynehappy]

Where else can the businessmen receive some salaries yet they work diligently on the businesses alone?

 

[riberet19]

I think this is a bad practice and should not be normalized in any business, the funds of the business should be only for the business and to make capital reinvestments in it.

 

[Suba]

As a business owner, I am also considered a supervisor so I get a monthly salary and it is recorded as salary expenses which will reduce income before tax. Even though the salary is actually only a financial recording procedure.

 

[Sanjeev]

As a business owner, I am also considered a supervisor so I get a monthly salary and it is recorded as salary expenses which will reduce income before tax. Even though the salary is actually only a financial recording procedure.

That's what every business owner does for the tax benefits. I have many relatives who are business owners and fix salaries even for their family members. They enrolled them on their employee's roll.

 

[Suba]

That's what every business owner does for the tax benefits. I have many relatives who are business owners and fix salaries even for their family members. They enrolled them on their employee's roll.

That's absolutely right, the main goal is to reduce the taxes that must be paid, if the owner and working relatives also need to be paid and accounted for. If a businessman uses a personal withdrawal system, it is impossible to legally reduce taxes.

 

[Suba]

If the business revenues are very low, it is very difficult for the business owner to fix a salary. I cannot predict when domains will be sold at a good price, so I cannot fix any salary.

There is no problem of low business income or even loss, this is just a financial recording process or system, which must be reported to the tax office, if your business loses then your business income tax is zero.

 

[King Belieal]

It is better to have a set amount from the business profits that you pay yourself instead of having to draw out from the business funds directly.

 

[Suba]

It is better to have a set amount from the business profits that you pay yourself instead of having to draw out from the business funds directly.

That's absolutely right bro, we should pay ourselves, even if only as an accounting record, rather than using the personal withdrawal option.

 

[Stardom22]

l think that the entrepreneurs should be paid by the own businesses because they work diligently on the business.