How to Pay Yourself Through Your Business in Murrieta, Temecula, Wildomar & Menifee — A Guide for Every Entity Type

Stephanie Peterson
6 days ago
3 min read

As a small business owner in the Murrieta, Temecula, Wildomar, or Menifee area, understanding how to pay yourself isn't just important, it’s essential for compliance, tax savings, and financial clarity. Whether you're a sole proprietor, LLC owner, S-Corp, or C-Corp, the way you draw income can vary dramatically. At Superior Virtual Bookkeeping, I help local business owners just like you navigate this with confidence.

Here’s a breakdown of how to pay yourself based on your business entity type.

Sole Proprietorship

Typical in Murrieta & Temecula among new entrepreneurs and home-based businesses.

How to Pay Yourself: Take an owner’s draw.
Tax Treatment: You’re taxed on the net income of the business, regardless of how much you draw.
Bookkeeping Tip: Keep personal and business accounts strictly separate, even though draws aren’t "expenses."

Example: If you're a dog groomer in Wildomar operating as a sole proprietor, you simply transfer money from your business account to your personal one, no payroll needed.

Single-Member LLC

Very popular in Menifee and surrounding areas for its flexibility and protection.

How to Pay Yourself: Similar to a sole proprietor, through owner’s draws.
Tax Treatment: The IRS treats you as a disregarded entity, income flows through to your personal return.
Important: Even though it’s an LLC, you don’t get to "pay yourself" a salary unless you elect S-Corp status.

Bookkeeping Pro Tip: Document every draw and consider setting up estimated quarterly tax payments.

Multi-Member LLC

Common for family-run or partner-based businesses in Temecula wine country and beyond.

How to Pay Yourself: Members take distributions based on the operating agreement.
Tax Treatment: Pass-through entity, profits are taxed whether distributed or not.
Recommended: Work with a bookkeeper (like me!) to ensure accurate capital account tracking for each member.

S Corporation

A powerful tax-saving structure for growing Murrieta & Menifee-based service businesses.

How to Pay Yourself: A combination of a reasonable salary and owner distributions.
Tax Treatment: You must run payroll for yourself (W-2). Distributions are not subject to self-employment tax.
Key: The IRS requires that your salary be “reasonable” based on industry standards.

Bookkeeping Necessity: You need to file payroll reports, withhold taxes, and stay compliant, this is where I can be a game-changer for your business.

C Corporation

Less common for small businesses, but still used by some in the Murrieta–Temecula region.

How to Pay Yourself: Through W-2 salary and dividends.
Tax Treatment: Corporation pays tax on profits; you pay personal income tax on salary and dividends.
Complexity Level: High. But with the right systems (like those I set up for my clients), it’s manageable.

Bonus: Don’t Forget Local Considerations

As a Murrieta-based business myself, I understand how state and local taxes, California LLC fees, and employment laws come into play. Whether you’re a Temecula winery owner or running a Wildomar-based salon, making the right payment choice can reduce your audit risk and improve your financial health.

Why Work With Superior Virtual Bookkeeping?

📍 Local Expertise – Proudly serving Murrieta, Temecula, Wildomar, Menifee, and the Inland Empire.
💼 Custom Solutions – Whether you’re a sole prop or an S-Corp, I tailor your bookkeeping to your entity and goals.
🧾 Tax-Smart Planning – I help you plan distributions, track draws, and manage payroll the right way.