10 Questions to Ask When Determining Your Salary

This post, which appeared in Entrepreneur.com, is very useful for a variety of reasons, the biggest of which is once you start making money, it’s frequently hard to determine how much you, the owner, should be paid. However, the article missed a couple of items:

1. Do you favor current money vs. taking money out when you sell? Capital gains rates are still more favorable than current income tax laws.

2. The article lists several pay comparability sites, but most of them are oriented towards wages, not owners. The wage side will let you know the hourly rates for the tasks that you do, but no one has assigned a hourly or weekly value to leadership lately.

3. If you want to pay yourself a lot of money currently, say because you have a bunch of kids in college, make sure you’re not going to run afoul of IRS regulations on owner pay. You can, however, pay yourself bonuses and escape scrutiny, we think.

4. Don’t be like the Bluths on Arrested Development and run everything through the company….even if you have a compliant CFO or CPA,  the IRS might still disallow the deductions.

Anyway, the article is worth reading: http://www.entrepreneur.com/article/226683

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