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Can I withdraw equity from my single-member LLC without it being income?

Forum|Forum|6 years ago
June 1, 2019
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Over the past 4 years, I have funded my single member LLC with personal funds. This year, I plan to start withdrawing that equity. Can I do so without it being taxed as income?

TurboTax Self Employed Online

Best answer by VolvoGirl

Then you have no separate equity. It's all yours in the first place. Technically you don't even need to keep a separate bank account for the LLC. It's all your personal money. Like it doesn't matter what account or credit card you use to pay an expense to deduct it. You can not deduct your own time or labor or amounts you paid to yourself.

VolvoGirl

Do you file your LLC separately as an 1120 S corp or just on your 1040 return Sschedule C? If you file schedule C the net profit or loss is your personal money and you can put it in or take it out without reporting it. On schedule C you only report actual income received and actual expenses paid out of pocket. You do not report what you pay yourself or take out.

K

kjmAuthor

I file a Schedule C on my 1040 return. Thanks for the quick response.

S

SweetieJean

Is this a different LLC than the one you mentioned here:
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/2762850-my-wife-and-i-own-a-llc-that-produces-k-1s-for-each-of-us-50-50-we-are-the-only-shareholders-which-version-of-turbotax-do-i-need-to-use">https://ttlc.intuit.com/questions/2762850-my-wife-and-i-own-a-llc-that-produces-k-1s-for-each-of-us-50-50-we-are-the-only-shareholders-which-version-of-turbotax-do-i-need-to-use</a>

VolvoGirlAnswer

Then you have no separate equity. It's all yours in the first place. Technically you don't even need to keep a separate bank account for the LLC. It's all your personal money. Like it doesn't matter what account or credit card you use to pay an expense to deduct it. You can not deduct your own time or labor or amounts you paid to yourself.