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Originally Posted by Lauxa  I have heard that if you own an LLC that it's better to take dividends than to become your own employee. Or to employ yourself to the extent that it is legal necessity (minimum wage?) and then to take dividends to cover the rest of your expenses. The reason being that you have to pay employment taxes on any money that you pay to an employee. Are you going to be using this strategy at all? |
Dividends are subject to double-taxation (company pays taxes on its revenue, and then you pay tax on the dividends that you receive from the company). This is why most young companies do not pay dividends.