Hammerhead
Registered User
- Messages
- 13
Hey there,
As the title suggests, how does tax work in a partnership? Let's say for instance there are two people, can they split it by a percentage. 50/50?
I'm trying to get my head around it. I assume standard practice is to pay wages to all involved. I realise all income less expenses is taxable. So if they pay wages is it taxed again?
The story is, a friend of mine is in a partnership. Currently they take drawings from the account as their "wages". That isn't the right way to do it I assume? So I was telling him to figure out a reasonable wage and pay it into separate accounts and put a dual signature restriction on the business account.
The problem is one partner likes to draw more than the other yet the tax bill is 50/50 and he is unsure how it works himself.
Sorry to over confuse the question. I know how tax works based on one person I just can't figure out the partnership.
Thanks I'm advance.
As the title suggests, how does tax work in a partnership? Let's say for instance there are two people, can they split it by a percentage. 50/50?
I'm trying to get my head around it. I assume standard practice is to pay wages to all involved. I realise all income less expenses is taxable. So if they pay wages is it taxed again?
The story is, a friend of mine is in a partnership. Currently they take drawings from the account as their "wages". That isn't the right way to do it I assume? So I was telling him to figure out a reasonable wage and pay it into separate accounts and put a dual signature restriction on the business account.
The problem is one partner likes to draw more than the other yet the tax bill is 50/50 and he is unsure how it works himself.
Sorry to over confuse the question. I know how tax works based on one person I just can't figure out the partnership.
Thanks I'm advance.
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