You transfer money from your business account to your personal account as needed, essentially withdrawing your share of the LLC's profits. This is the simplest method since you're taking distributions of money you already own as the business owner. The amount and timing are entirely up to you, as long as the business has sufficient cash flow.
Tax treatment: Owner's draws are not taxed as wages, but you'll pay self-employment tax on all LLC profits whether you withdraw them or not. In Maine, you'll also pay state income tax on your LLC profits at rates ranging from 5.8% to 7.15%. The draw itself is not a taxable event since you're already taxed on the LLC's entire profit.
How to do it
Ensure your LLC has sufficient cash flow and profits to cover the withdrawal
Transfer the desired amount from your business bank account to your personal account
Record the transaction in your business books as an owner's draw or distribution
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Guaranteed Payment
The LLC pays you a predetermined amount on a regular schedule, similar to a salary, but without payroll taxes. This payment is guaranteed regardless of whether the LLC has profits that month. Guaranteed payments are treated as business expenses for the LLC, reducing its taxable income.
Tax treatment: You'll receive a Schedule K-1 showing your guaranteed payments as ordinary income subject to self-employment tax. Maine will tax this income at state rates of 5.8% to 7.15%. The LLC can deduct guaranteed payments as a business expense, which reduces the overall taxable income distributed among all members.
How to do it
Establish the guaranteed payment amount and schedule in your LLC operating agreement
Set up regular transfers from the business account on your predetermined schedule
Track guaranteed payments separately from profit distributions for tax reporting purposes
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Salary via S-Corp Election
Your LLC elects to be taxed as an S-Corporation, allowing you to become an employee and pay yourself a reasonable salary subject to payroll taxes. Any remaining profits can be distributed as dividends, which avoid self-employment tax. This creates potential tax savings but adds payroll complexity and requires reasonable salary standards.
Tax treatment: Your salary is subject to payroll taxes (15.3% for Social Security and Medicare) and Maine income tax withholding. Distributions beyond your salary avoid self-employment tax but are still subject to Maine income tax at rates of 5.8% to 7.15%. You must pay yourself a reasonable salary before taking distributions.
How to do it
File Form 2553 with the IRS to elect S-Corporation tax treatment for your LLC
Set up payroll processing to pay yourself a reasonable salary with proper tax withholdings
Take additional profits as distributions after paying your required salary
Maine Tax Notes for LLC Owners
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Income Tax
Maine taxes LLC owner income at graduated rates from 5.8% to 7.15%, with the top rate applying to income over $54,450 for single filers in 2026. LLC profits are taxed as personal income regardless of how much you actually withdraw from the business.
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Self-Employment Tax
Maine LLC owners pay federal self-employment tax of 15.3% on their share of LLC profits when using owner's draws or guaranteed payments. Maine does not impose additional self-employment taxes beyond the federal requirement.
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Estimated Taxes
Maine LLC owners must pay quarterly estimated taxes if they expect to owe more than $1,000 in state income tax. Federal estimated taxes are required if you'll owe more than $1,000. Payments are due on the 15th of January, April, June, and September.
Common Mistakes to Avoid
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Mixing personal and business expenses by using business accounts for personal purchases instead of taking proper draws
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Failing to pay quarterly estimated taxes on LLC profits, resulting in penalties and interest from both Maine and the IRS
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Not documenting owner's draws in business records, making it difficult to track distributions for tax purposes and potential audits
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Taking irregular or excessive draws without considering cash flow needs, or conversely, not paying yourself enough to cover living expenses