How Will You Pay Yourself?

The poet said, let us count the ways — but we like to add "to get money out of your business." And they abound. The form they take often depends on which structure you choose to operate your business: sole proprietorship, partnership, limited liability company, C corporation, or S corporation.

Among the usual methods are:

• Salary
• Bonuses
• Loans
• Basic fringe benefits
• Retirement benefits
• Life insurance benefits
• Expenses paid by the business
• Dividends
• Rental income
• Delayed compensation
• Family payroll — income shifting

Each compensation method has its appropriate uses. Inappropriate use of any of them can be detrimental to your business health and your personal wealth, tax-wise and otherwise.