The type of LLC you have is the first thing to think about. You cannot pay yourself a salary if your LLC is taxed as a partnership or a single proprietorship. Instead, you must accept a profit distribution. You may, however, pay yourself a salary if your LLC is taxed as an S-Corporation or C-Corporation.
The revenue generated by your LLC is the second factor to be taken into account. Paying yourself a salary may not be the best course of action if your LLC is not generating enough revenue to cover it. Instead, you might need to accept a profit distribution. Remember that while paying yourself a salary is subject to payroll taxes, receiving a distribution of profits is not.
Your own financial status is a further consideration. Paying yourself a salary may be required if you require a consistent income to fund personal expenses. However, it may not be required to pay yourself a wage if you can survive on distributions or irregular gains.
Let’s start with the first of the connected queries, which is whether it is preferable to fax or mail IRS. Your preference and level of urgency will determine the answer. The IRS can take several days to receive documents sent to them via mail, which is a more conventional way. However, faxing is a preferable choice if you need to distribute information quickly.
Use certified mail with a return receipt required if you choose to mail paperwork to the IRS. You will be able to prove that the IRS got your paperwork in this way. On the other hand, you can use an online fax service if you choose to fax papers to the IRS.
There are numerous online faxing options, including eFax and MyFax. You may send faxes using these services from a computer, tablet, or smartphone. You can fax documents that you have uploaded. A free trial is another option that some online fax services provide, and it’s a wonderful opportunity to test out the service before signing up.
I’ll come to the last question: can you fax your tax return to the IRS? No, is the response. Tax returns sent by fax are not accepted by the IRS. Instead, you can file your tax return electronically with software that has been approved by the IRS or through a tax expert.
In conclusion, whether you can pay yourself a salary from your LLC relies on a number of variables, such as the nature of your LLC, its profitability, and your own financial condition. Depending on your desire and urgency, you may want to mail or fax documents to the IRS. Faxing in tax returns is not an option, though.