Mark Kohler breaks down whether to put your spouse on payroll or take an owner's draw. Either way the money lands in the same joint account and gets reported the same on your taxes. The difference is payroll adds employer taxes and filing costs you'd avoid with a draw.
Should I pay my spouse or not? When you're in a marriage, it's a partnership, and there's no way your spouse is not involved in the business. So they do need to be compensated. But putting them on payroll is really what we're talking about. We'll give you some ideas on how to do it most effectively. If you don't pay your spouse, you're going to take a draw of 50,000, and it's going to go into your joint marital bank account or as out as marital property, essentially. So whether you take the 50 into your personal account or you pay your spouse the 50, the money's going to end up at the end of the day in the same bank account on the same 1040. But what you're avoiding are the all those those payroll costs of putting them on payroll.
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