Is moving money from your business account to your personal account payroll?
Moving money from your business account to your personal account feels like paying yourself, but payroll is something different. If nobody has ever run you a paycheck, it’s worth asking your CPA whether your business is supposed to.
The short answer
Not by itself. A bank transfer just moves money you already own. Whether your business is required to run payroll for you depends on how it’s set up, and that’s worth confirming.
A transfer isn’t a paycheck
Moving money from your business account to your personal account can feel like paying yourself. But a transfer just moves money you already own from one account to another. It doesn’t create a paycheck, and by itself it doesn’t change your taxes.
What payroll actually is
Payroll is a process with four parts:
- The business runs you a paycheck.
- Taxes are held out of it.
- Those taxes are sent in.
- The wages are reported on a W-2.
Why it matters
Some businesses are required to run payroll for the owner, and some aren’t. If transfers are the only way you’ve ever paid yourself, it’s worth finding out which kind of business you have. If payroll was required, tax returns you’ve already filed may not be right.
How we handle it
At Sansone CPA & Financial, we coordinate your tax, investment, and retirement decisions so the way you pay yourself can match the way your business is taxed.
This article is general education, not tax, legal, or investment advice for your situation. Tax rules change, so talk with us before acting on it.
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