Q: What Is an Owner’s Draw?

Also sometimes simply called a “draw,” an owner’s draw is money that is taken out of your business directly and is not taxed via payroll.

Draws are often taken by owners of sole proprietorships, partnerships, or LLCs, as the owner may not be eligible to be on payroll.

Remember, cash and assets you have taken out of your business as a draw are still most likely subject to taxes on a personal level. Here’s an overview of the pros and cons of an owner’s draw and how you can do one. 

owner's draw

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