Let's say I own a business selling widgets on the web. I'm incorporated, most likely an LLC. The business is doing really well and there is a lot of cash flow. Since I'm separated from the business by the LLC, how do I as the business owner reap the benefits of my successful online business? How do I take some of the profits out of the business?
There are two main ways an LLC owner can obtain money from the LLC:
These two methods have different tax implications, so speak to an attorney or accountant about these.
To make a point about Tim's comment, an LLC does not have to be a pass-through entity. An LLC can choose to be treated as a separate corporation for tax purposes. From the Nolo website:
See Simple Overview of LLC Pass Through Taxation for more details on pass-through taxation.
The IRS has information about procedures for compensating yourself for your efforts in carrying on a trade or business. Here are some of the procedures discussed there: