I live in miami and am about to form an LLC. I have also decided that I would elect to have my LLC to be taxed as S corp. I will be the only employee for next 6 to 9 months.
Since it is a S corp I need to pay myself a salary. I have decided to pay myself a salary of $90K per annum which is reasonable for a software engineer in Miami.
Now let's assume that in a year the company's revenue is $160K. Expenses was like $20K on various things. Salary expense was $90k. So the total profit of the company is 160 - 20 -90 = 50K.
Now from this 50 reduce the social security + medicare . To keep it simple I am keeping that as 6k.
Net money still in bank = 50 - 6 = 44k
On this 44k I do not need to pay self employment tax ( social security + medicare). This is the main reason why I am in favor of electing to be taxed as S corp.
Here is my question:
When do I get hold of this $44K. Every month I am getting my salary. Do I need to wait for the year to end to get hold of this $44k.
If I want say 3k per month from this 44k then how do I do that. This is not my salary. It would be like earning bonus before the year has ended.
I am planning to use http://www.surepayroll.com/ for payroll processing.
Update: After posting this question I came to know that what I'm calling 'bonus' is technically called 'distributions'.