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When should I take a salary. Great question.
First welcome to this web site and it is great that your business is started to show a profit.
To give you a good answer we need more info. Is your business a Corp??
Do you have an Accountant?? How is your Cash Flow??
Salary is a business expense that you can deduct on your taxes.
Are you taking money out of the business now??
Tell us more and yes we can guide you.
Thanks for your help, Yes, I am a Corp, and I do have an accountant. My accountant mentioned in December that in the next couple of months I would be ready to start taking a salary. He did not give me any details as to why and before I talk to him some more I wanted to get other opinions and more information about the subject. My cash in the bank will get me through most of May. Up to this point I have been using any extra money in my checking to pay down my loan I used to start the business. I have enough to get me through another three months in my accounts receivables but that is assuming that everyone pays as expected which as you know probably won't happen. It takes an average of 45 days after the job is done to receive payment in my business.
When should I take a salary??. Great to know that you have an accountant.
Are you going to be the only employee??
The nice part of owning a business is that IF money gets tight
(lets hope NOT) you can always skip a salary now and then.
And at year end if needed you can also take a bonus.
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I started a new business last year and just now started to show a profit according to my Quickbooks profit and loss statement. I have been using any extra money to pay down loans. At what time do I need to take a salary? Is it better to wait or does it matter? Thank you.