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anson89
06-13-2015, 02:43 PM
Hi all,

My main business is an auto detailing & reconditioning business, which I have set a minimum monthly income for myself enough to cover my personal expenses.

I'm getting ready to start an eco-friendly mobile detailing business and adding employees.

My question is, if you have multiple streams of income (businesses, investments), how do I set a salary for each business? For example, the mobile detailing business that I am starting. I know I have to meet a certain amount every month to cover business expenses, but my personal salary, I have no idea what to set it at.

Thanks!

turboguy
06-13-2015, 09:25 PM
You can set it however you want. Since it is a new business if it takes a while to be profitable you don't even have to take a salary. Generally it is better to set your salary to where the business retains some cash. Once it becomes highly profitable (hopefully) there may be some minimums you need since the IRS would frown upon accumulating too much cash without taking a salary. Generally if the business is doing well the IRS does not like it if you are not the highest paid employee. Other then that there are few restrictions. Having a low salary and taking a sizable distribution (which avoids the wage taxes) would also raise some red flags.

veritasvisions
09-18-2015, 01:08 AM
First, think about the practicality of starting multiple businesses at the same time. Focus on one business, make that extremely successful, hire the right people, and then maybe you can start another business.