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3 Replies Last post: Mar 1, 2009 8:34 PM by Lighthouse24

Injured expense payments?

Mar 1, 2009 7:46 AM

Click to view ccsigndude's profile Professional ccsigndude 4 posts since
Feb 28, 2009

I
am self employed. Operating as a LLC/Member, in the state of Michigan.
Last year I injured myself doing work for the business. I was unable to
collect Workers Comp & Unemplyment due to ownership status/LLC
structure. I required major surgical repair to my spine & the
medical bills were covered under Blue Care Network(my Wife as primary).
Now in the last 3 months of the year as I was bedridden, I paid myself
weekly as a "draw"(taxes not deducted). I had to hire an additional
employee(taxes deducted) to take care of my responsibilities. We are
barely staying open & I may lose my home.

My Question: Is there
a way I could have "Expensed" the money I used to pay my wages while I was out of work? Along the lines like sick pay-
statutory, fringe benefit-other compensation or medical/insurance
payments. Allowing me some form of decrease in taxable income. I think the UK has something like this called "Incapacity Benefit". Does the US?????

Any creative help would be welcome.


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Click to view LUCKIEST's profile SCORE LUCKIEST 8,132 posts since
Aug 6, 2007
1. Re: Injured expense payments? Mar 1, 2009 8:26 AM
Injured expense payments, Welcome

You need to talk to an Accountant. It is my understanding that if you take a "draw", the draw is not Wages and is not a deduction (Expense).

Good luck, Get better, and talk to an accountant. LUCKIEST
Click to view ccsigndude's profile Professional ccsigndude 4 posts since
Feb 28, 2009
2. Re: Injured expense payments? Mar 1, 2009 5:32 PM
in response to: LUCKIEST
Thank you. I planned on talking to the accountant.
Click to view Lighthouse24's profile Founders Lighthouse24 2,402 posts since
Oct 10, 2007
3. Re: Injured expense payments? Mar 1, 2009 8:34 PM

I'm no accountant, but there's no way to do that as far as I know. It seems to me that for an LLC (a pass-through entity), profit is profit (and therefore taxable) whether you take it as a "draw," a salary, a distribution, use it to expand, leave it in the bank, or whatever.


I hope you've recovered fully, and that things turn around soon. Best wishes.