5 Strategies for Getting More Money Out of Your Business

Your business is finally making a great profit-one that is consistent and reliable. You've worked for a long time to reach this milestone, and as the owner of the business you've paid a steep price for its success, both financially and personally.

It's probably been ages since you took a week off, or much less, worked just an eight-hour day. Surely, the time has come when you can reap some of the rewards for all of your hard work as you piggyback on the profitability you have labored so long to achieve.

You are now in a position to start paying yourself for your hard work. Here are some of the most powerful strategies for getting money out of your business-ways you probably haven't thought of.

1. Payroll or Owner's Draw

When you have a sole proprietorship, LLC, or partnership, you can pay yourself just like you would pay any one of your hardworking employees. In this kind of structure, the profits that your business generates will be passed on to you, and they will be subjected to taxation on your personal returns.

Distributions (rather than earned wages) from an S corporation's net profits are not subject to Social Security or Medicare withholdings; rather, the profits of the S corporation flow through to its shareholders and are taxed as ordinary income on the shareholders' individual income tax returns. So when your company is setup as an S corp, you can avoid the Social Security and Medicare withholdings as well as the employer matching components on your distributed income.

2. Year-End Bonus

The end of the year is the perfect time to celebrate and reap the fruits of your efforts during the previous 12 months. Give yourself that lump sum on top of anything that you have gotten in your partner draw. You may want to keep a percentage of the available money to carry over to the next year since there is no way to estimate what your expenses will be.

3. Use a Capital Dividend Account

Capital gains originate from the allocation of capital assets like stocks, equipment, real estate, or bonds. Fifty percent of your capital returns are taxable, while the other 50 percent stay in the capital dividend account. This cash could be distributed to your shareholders without taxes. Ensure that your accountant fills out the correct forms to make sure that there are no errors during the process.

4. Business Paid Benefits

Health care and other benefits could help you and your loved ones save hundreds to thousands of dollars each year. You should allow your company to provide all those benefits to you, including the need to offer a fair and satisfying retirement plan which you may contribute to on a before-tax schedule.

5. Make the Most of Deductible Expenses

Business deductions may not give you more money, but they reduce the sting of the expenditures in your business. Fortunately, it is legal to take tax deductions for all of your business-related expenditures, which include transportation and entertainment costs with your company car. If possible, you may want to think about putting some of the members of your family who are included in the lower tax bracket on the payroll. By doing so, some of your income won't be taxed so steeply.

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The post 5 Strategies for Getting More Money Out of Your Business appeared first on AllBusiness.com.