Is what I descibe below paying someone under the table?

Question

Scenario:

I am apart of an LLC and need to get paid between pay periods...like right now. So I requested a cash advance in the form a western union as it is kind of an emergency.

I have a guy that is managing the money and he considers this an under the table payment. First of all I think that was a little extreme that I was accused of requesting an "under the table" payment as I considered that this would be a payment like any other and SURELY I plan to pay taxes on all that happens with this business. So..yeah it kind of rubbed me wrong I guess you could say.

Ok so its not a normal paycheck but isn't this just as simple as clarifying the money paid out in a journal entry?

Thanks in advance to any and all responses.

Mike

Answer 1

Are you a partner in the LLC?  If so, you either are being paid as an employee, in which case you can draw against future earnings or you can take an Owner's draw against your portion of any profits, if other partners agree. Your money manager should be aware of this ledger account. below is from the irs website.

LLCs filing Partnership Returns

Generally, members of LLCs filing Partnership Returns pay self-employment tax on their share of partnership earnings.

There is a special rule for members who are the equivalent of limited partners. They pay self-employment tax only if the LLC pays them for services.

Answer 2

He,s right on this one, and should not give an

advance, live in your means.

Answer 3

Sounds okay to me. Pleanty of people take a n advance on their salary.

Answer 4

It is not an under the table payment.  Your money manager should process it correctly and withhold the proper amount of taxes.

Answer 5

If the advance gets taken out of your next paycheck, it is called a loan.