Monthly Archives: March 2020

Nothing is more exciting than buying your first home, except maybe updating it and making it your own. While kitchen rehabs, before and afters are inspiring, completing transforming full rooms can be a daunting task. 

No matter what projects you want to plan you have for your home, there are easy updates that will make everyone’s room look great. Many buyers don’t know much about home repairs. Some are even afraid they will hurt their home value if they do the repairs wrong. These are easy repairs that will make any room look great! 

These updates not only are easy, and inexpensive but can make any room in your house look great. Here are easy home updates that will make your home look great!

Install And Update Base Trim

The base trim is an accent that is super easy to repair, install and update, that only takes a few seconds to learn. The hardest part? Deciding what kind of trim you want to have. While new trims do require properly measuring and cutting of materials this easy repair should only take an afternoon. 

The hardest part of installing a new base trim to make sure you measure correctly, and with a few screws or nails, will be done before you know it! Make sure before you purchase materials that you measure correctly. While it will require a saw to cut your materials, and a few hammers and nails, this easy repair is great for giving your home a uniform look!  Check this article out for more tips on installing your trim. 

If cutting your trim seems a bit intimidating, adding a new color such as white to your trim will make it look more uniform and cohesive. 

You can also easily update your base trim, by adding a nice clean coat of paint, for an extra pop in each room. 

Change Door Knobs And Locks

Security is an important feature in any home. Even though many homeowners wanted their home more secure, many still don’t know how to repair and replace the locks in their home. 

Hard money lenders suggest that any homeowner looking to sell upgrade their doorknobs and locks to attract new buyers. 

Replacing doorknobs is easier than many people think! Replacing doorknobs only really requires a screwdriver and about 5 minutes to do! 

You can buy many different types of doorknobs and locks that can match every time at home! You can give your house a uniform look, or spice it up with some eccentric pieces.   

To change the locks, unscrew the doorknob from the inside and pull the knobs apart. Simply replace it with the new doorknob or lockset! 

Make your home-owners feel safer, and cleaner with shiny new handles and locks! 

Always make sure you get extras of the keysets made, so you don’t have missing locks!

Install New Sink Hardware

When water or electricity comes into play, many homeowners don’t know what to do. But if you have a leaky faucet or just want to add a new sink handle, the repair is pretty easy! The most important step for this repair? Make sure you turn off the water! 

When adding new handles, it is like using a screwdriver, caulk and a bit of elbow grease. 

A new sink can make a kitchen, or just add some interest in a bathroom! 

While the options of sinks are never-ending, as is the function, removing and installing new sink hardware is easy to repair that can transform the room. 

This repair can take a while with the clean up of trim, and caulk, but is a worthwhile repair.

Paint

We love how paint can transform a room. This is a super simple repair, but the effects can completely change the mood and feel of your home. 

While private money lenders in Arizona suggest more neutral tones for colors, the options are endless!

Light and cool tones are great for adding timeless appeal to your home. Depending on your taste, don’t be afraid to go bold with fun colors if you are looking to make a statement. 

When Painting, all you will need is some drop cloths, paint brushes, rollers and time! 

Summary

Updating your flip can seem daunting! While you should always use a contractor for big-ticket repairs, such as roofs, or electrical work, doing these easy repairs yourself can save time and money! These repairs are simple, fast, and will look great in your flip. Learning these repairs will not only make you feel like a total handyman but offer high ROI with pennies to the dollar.

• Trim: From installing to cleaning up base trim, this easy repair will add a great finish to every room. 
• Door Knob and Locks: installing new doorknobs can help add a cohesive look to your home, and added security. 
• Sink Hardware: leaky faucets, no more! You can easily replace your faucets in mere minutes. 
• Paint: painting your home instantly transforms how it will look! 

About the Author: Catherine Way graduated from Michigan State University with her Bachelor of Advertising, with a specialization in Graphic Design. She is a content marketer for business, mortgage, and real estate industries. She currently writes and reports for  Prime Plus Mortgages – Hard Money Loans

Today we’re going to be talking about how to pay yourself in a single-member LLC. I want to talk about, because of so many of you that are starting as bloggers, as doing eCommerce businesses, you maybe are freelancers, photographers, whatever you might be, you are forming single-member LLCs. I know that because I’ve talked to a lot of you and that’s basically the default entity of choice. Another alternative, which I’m going to talk about in a later blog post is an S-corp. But for purposes of today, we want to talk about single-member LLCs because that does represent so many of you out there. And the biggest question that a lot of people ask is how exactly do you pay yourself with a single-member LLC? And it’s a completely legitimate, valid question that I want to help you with today.

In reality, it’s not that simple because there’s a lot of different things that you need to consider when you’re paying yourself in a single-member LLC. You have to consider what your expenses are in the business and making sure that the business is capitalized enough to pay those expenses. You have to consider what your taxes are going to be at the end of the year when you pay yourself in a single-member LLC because all the income that you get in a single-member LLC that goes in after you take out all the taxes, whatever’s leftover, that pot you have at the end of the day, that’s what you’re going to get taxed on.

Now, I like to follow a method by Mike McAlary. It’s called profit first. Basically what Mike says to do is to pay yourself two days a month. So you pay yourself on the 10th and the 25th. I kind of do distributions throughout the month. I’m not a single-member LLC. I’m an S corporation, but I’ll talk to you about what I do here. The way the profit first methodology is basically every time you get money in on the 10th and on the 25th, that’s when you pay your bills and you calculate a certain percentage of that income that’s going to go towards paying yourself a certain percentage that’s going to go into a separate tax account, a certain percentage that’s going to be for owner’s profit and a certain percentage that’s going to go towards your expenses. And as you start to do this more and more, you’re going to figure out what percentages you’re going to need to put into those different accounts.

He actually advocates, and I recommend doing this, I’ve done this for myself, setting up four different accounts for this. So the way I’ve got it right now is all my money when it comes in, it goes into my operating expenses account and that’s where the money will stay. Now, I have some money that comes out automatically through different subscriptions I have and things of that sort, but that’s where the money is. And then, whenever I need to pay myself, I will go in and look and see how much money was made between when I last paid myself and the day that I’m going to pay myself next. And usually, it’s about once a week on Fridays and I’ll look at that, I’ll take a certain percentage of that as the money that I’m going to pay myself and it’s usually about 50%, I will take a percentage that is going to go into the owner’s pay or the owner’s profit account, which is basically like a savings account that just keeps growing and growing and growing and a certain percentage that’s going to go into a tax account.

Now, the thing that you need to know about the tax account is people think, I’m going to get taxed, 20 30% or whatever it’s going to be at the end of the year. It’s not on your gross income, it’s on your net income. You’re only really getting taxed on your expenses. So if you’re holding back, let’s say 30 or 40% for taxes or for, excuse me, for your expenses, you don’t need to withhold 20% of your total gross income. You only need to withhold 20% of maybe the 30% that you’re allocating for your expenses. And if you do the math there, I’m not sure what it comes out to, but basically, it’s a much lower percent. So, I’m withholding usually anywhere from three to 6% for taxes.

Another thing I’ll say that I do here is with an S corporation, you need to pay yourself a reasonable salary. So at the end of the month, my distribution is much bigger and I use some of that money that’s been accumulating over the month in my owner’s pay account. And then I pay myself at the end of the month what is considered a reasonable salary. And again, that’s something we can talk about in another blog post. That’s only if you’re an S corporation. That’s really what you need to do. When you write this check to yourself, you’re just going to code that as a member distribution, shareholder distribution, whatever you want.

When you start earning a net income of probably 35 to $50,000 or more, then you really want to start thinking about electing S corporation status or actually forming an S corporation for your business. And the reason for that is with an S corporation, you’re paying self-employment taxes on the amount that you take out as a salary. You do not pay self-employment taxes on the amount that you take out as your distribution and you don’t actually need to take a distribution. It’s just whatever money shows up as your net income is the money that you’re going to get taxed on, on your income tax level. But with an S corporation, the self-employment tax doesn’t come into play.

With an LLC, you might never take a distribution from your business, but all that income from the LLC is going to flow through to your tax returns and you’re going to get hit with a 15% self-employment tax on all of that. That’s why I say, once you’re making 35 to $50,000 net income a year, you really want to consider S-corporation status. So that’s what I got for you today. Feel free to comment below. Let me know if you got any questions. I’m happy to talk to you about these issues. I love talking about single-member LLCs and how they can help you and your business. So thanks, folks. Have a good day and catch you next week.

Today we’re going to talk about one of the most common questions I get from people that are forming LLCs, how to pay yourself with an LLC. We’re going to focus on something really important to a lot of you, and that is how to get paid with your online business.

Today’s blog is going to focus primarily on how to pay yourself if you’re running a single-member LLC. If you’re a multi-member LLC, it’s going to be a little bit different, and that’s the subject of another blog post. But today we’re going to talk about a single-member LLC, and we’re going to talk about the two different ways that you can pay yourself as a single-member LLC, and that’s as a disregarded entity on the one hand, or an S corporation, as far as taxing status on the other. So the first method to pay yourself is if you’re just a blanket garden variety, vanilla single-member LLC, you’ve not elected any type of S corporation status. And the way to do that is you are going to write yourself a check.

The second method is to pay yourself what is called a reasonable salary. And when you do that, you’re going to withhold payroll taxes, FICA, state, and federal, withholding, all those types of things will be done, because you’re going to pay yourself a salary, and you’re going to receive a W2 at the end of the year, just like you would if you were an employee for any other business. So you do this when you’ve made an S corporation for your business. And that’s because if you’ve elected to be taxed as an S corporation, you have a legal requirement to pay yourself that reasonable salary we just talked about.

You’re probably wondering what is a reasonable salary? That’s a great question. I’m glad you asked. So a reasonable salary is something that … it’s a term of art that was created by the IRS, and it’s going to vary depending on the type of business you’re in and your role in that business. So generally speaking, what a reasonable salary is, it’s the amount of money that you would pay yourself if instead of being the owner of the business you were actually the technician doing the work in the business. Does that make sense? So for example, if you are a law firm, it’s the amount of money that I would pay myself if I were a lawyer working in a similarly sized law firm. If you are, let’s say an agency owner, it’s the amount of money that you would pay that graphic designer to do the work of designing graphics for your clients or customers, so when you elect to be taxed as an S corporation, it does get slightly more complicated, and a little bit more confusing when it comes to the payroll aspects of your business.

I’m going to venture to guess, and this isn’t that much of a guess, I don’t think this is that farfetched, that if you elect to be taxed as an S corporation, in all likelihood you’re going to need to go ahead and hire a bookkeeper, or an accountant, or a third party agency of some sort, service, who can help you run payroll for your business.

If you elect to be taxed as an S corporation under no circumstances, unless you have an accounting background, and you know how to do these things, should you try to do payroll on your own? You will, will, 100%, I guarantee mess this up. And not only that, for like 50 bucks a month, you can hire a service that’s going to do all this for you. They’re going to file all the forms. They’re going to file your quarterly taxes. They’re going to deposit the money in your account. They’re going to do all these things for you.

For the vast majority of you out there who operate as an LLC, you’re going to be what’s called a disregarded entity, which means that you have not yet elected S corporation status, or C corporation status, or any taxation status for that matter. For those of you that fall into this situation, you basically can pay yourself whatever you want, whenever you want, however you want from your business bank account to your personal bank account. That means you can write a check. That means that you can do an electronic transfer. If your bank allows a business to personal transfers, some do, some don’t, or you can just withdraw cash and deposit in your account. The only requirement that you need to be concerned about is to make sure your LLC is properly capitalized, so that you don’t run the risk of violating any terms for purposes of piercing the corporate veil.

Let’s touch on briefly how much you actually are going to pay yourself as the owner operator of your single member LLC. For a single member LLC, each month when you get revenue in, you’re going to pick a couple of days, let’s say the 10th and the 25th, and you’re going to make target allocations. So that might be anywhere from 30%, to 50%, to 60% of your revenue is going to go to your owner’s pay. And you’re going to take that amount, that percentage from your revenue, and you’re going to transfer that into an account for owner’s pay. The remainder, whatever’s left, is going to be divided up between profit, taxes, and expenses for the business, and you’re going to have separate allocations for each of those, and you’re going to transfer the money into a separate account for those categories as well.

So you’re going to have four accounts, owner’s pay, expenses, taxes, profit, and that’s how you’re going to pay yourself. Thanks so much for reading this blog post.