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Return to Website  > Index  > General Tax Issues  > Retirement Planning  > Moving cash from LLC to personal account
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Dr Singh
Jul 10, 2011 - 1:22AM
Moving cash from LLC to personal account

Just a basic questions on how to move my cash from my LLC account to personal use. As a single-member LLC, I know it is all 'pass through' for now, so it shouldn't technically matter - but how do I go about making sure I move the "LLC" money to my personal accounts? (so that I can have some flexibility to put it into a higher yield savings or CD) ...

Can I just write myself a check being the solo owner? I read something about "Owner Draws" ... Does the memo on the check suffice or do I have to have a separate account to 'receive' the draw initially (I have a personal account and a business account in the same bank ... my highest yield comes from a personal account in a separate online bank ... the thought was to move money from LLC acct to personal acct in same bank and eventually to the other online bank) .... Since 100% of my income is now coming to my LLC and I am not an 'employee (w-2)' anywhere, ALL my money is 'stuck' ...

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Andrew Schwartz CPA
Jul 10, 2011 - 8:40PM
Re: Moving cash from LLC to personal account

When you are the sole owner of an LLC, you don't pay yourself through payroll. Instead, you just draw out the profits that are available from time to time. To do so, simply write yourself a check from the LLC account, and deposit that check into your personal account. Label that check as Owner's Draw, and make sure not to deduct the payment as a business expenss on your Schedule C.

Zip Code: 01801

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Dr Singh
Jul 11, 2011 - 7:13PM
Re: Moving cash from LLC to personal account

Would it be kosher to just electronically transfer said funds (so long as I can put some sort of 'memo' on it saying 'Owner's Draw')? I have a good chunk of change sitting in the LLC and I was just trying to make sure I don't 'pierce the corporate veil' for what it's worth ... I have personal and business accts with Chase, so an electronic transfer would be nearly instant and it's a big sum of money so I would rather not have a check come to me (from my LLC account) in snail mail and then have to go deposit the same ... pls advise ...

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Andrew Schwartz CPA
Jul 11, 2011 - 8:54PM
Re: Moving cash from LLC to personal account

This is more a question for a lawyer, but I would think that an electronic transfer from your business bank account to your household bank account would be fine. It's my understanding that you would "pierce the corporate veil" by using the business bank account like it's your personal account, and paying all of your personal expenses directly from that account. That does not appear to be the case here.

Zip Code: 01801

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