Business

How to Transfer Money from a Business Account to Personal Account

Transferring money from one account to another is a common type of business transaction in everyday life. You may transfer your money from a checking to a saving account, pay your bills, send your money to your friends or family or pay your credit card balance. There are some methods to transfer money from a business account to your accounts that you should know for essential. You can move your money with efficiency with minimum fees. So if you want to know how to transfer money from a business account to a personal account, keep reading this informative article.

How to Transfer Money from a Business Account to a Personal Account?

how to transfer money from a business account to a personal account

From a banking and business point of view, it is possible that you can transfer money and funds from your business account to your account. The bank cannot prohibit you from doing any such transaction that you perform within the legal limits, laws, and regulations and if you have sufficient funds in any of your accounts.

The legal requirements and implications

There are different consequences and implications regarding the transfer of funds on you and as well as on your company, and if you are an individual, it will be a different case. In the United States of America, any withdrawal of funds from your business account on a private basis is just like paying the salary to you. But you have to pay the tax on it and as well as for your company expense.

The financial condition of your business 

Another factor that is important in this regard is the financial condition of your business. Keep in mind that there are a few limitations and boundaries in which you can withdraw money from your account, especially if your company is insolvent. This will be a case of fraud where people sometimes try to take out your funds by exploiting an LLC or a corporation without being liable for it.

It is always a debatable issue to discuss the rules and regulations, limits within accountants that vary from country to country. If you want to transfer money from the business account to the personal account, it is easy.

Single-member LLC

You can note that a single business owner who is a member of an LLC can transfer money from the LLC bank account to the personal bank account by taking the owner’s draw and writing a business check to themselves, in the condition if the bank allows the individual.

Multi-member LLC and C Corporation

Every member of LLC or any member of C Corporation owns capital or principal amount, financial activities, and a share in his membership. When any member requires money for business purposes, they draw from the company their capital account. It would help if you remembered that these draws go through by business checks written on the name of the member.

S-corporation 

The S-corporation is either a C Corporation, LLC or S corporation is essential for the special treatment for tax with the IRS. The S corporation income, deductions, credits, balances, checks, and losses are passed on the shareholder’s personal federal income tax returns and profits. The shareholders then intimate the business’s income and losses on their tax returns, and the individual is liable for the income tax rates. 

Even though S corps and LLC have passed through the regular tax treatments, there is a big difference. The shareholders of S-corporation who do the significant part for S-corporation are the actual employees of the company. Due to their business, they expect to have payrolls and compensate through their wages and salaries. Social security, income taxes, Medicare taxes, unemployment taxes, and other types of taxes are withheld.

Therefore, the company’s shareholders will get the remaining profits of the S corporation as a distribution which will then inform the distributions on their income tax returns and profits. The distributions are not like the wages and salaries and are not dependent on FUTA and FICA taxes. So you should keep in your mind that if the distributions of the shareholder increase from the shareholder stake in the business, that increased amount will be payable for tax as long as the capital gain.

S- Corporation In USA

In the United States, it is unusual for the S corporation owners to run in the cumbersome process because they are getting the minimal salary and then get the compensation in the shape of distributions to make the amount of FUTA, and FICA minimum, and the amount of payroll taxes for which they are liable.

You should note that the social security administration and IRS are attentive in checking those people and individuals who try to fraud and game in this way. The government foresight that the S corporation owners pay a reasonable salary depends on the shareholder’s duty and the industry.

Transfer of Money between Connected Accounts

how to transfer money from a business account to a personal account

If you have accounted for your business and personal use, it is an easy and fast process to transfer the money from one account to another. This is the actively internal transfer of funds. You have to go to your bank or mobile app’s online banking app and search for how you can transfer the money. There you will get the option of setting up one time transfer or a repeating transfer.

Most banks will allow you to transfer the funds frequently on the same business day or to make a transfer on the next date. If you have a connection between your business account and personal account for the first time, it will take two to three business and working days to transfer money.

Transfer of Money to External Accounts

Transfer of Money to External Accounts

For transferring money to any external accounts, you have to provide the bank routing number and account number for both accounts. One will be the external account that will receive the transfer, and the other is from which you are transferring money. The bank will help you in receiving the money and setting up of transfer.

Once there is a connection between the accounts, you can quickly transfer the money to your external accounts without giving your router number and account number after each transaction. 

Make a quick and easy transfer from the business account to a personal account.

You can quickly transfer your from your business account to your account by following these steps.

  • Set up an automatic transfer from the business account to a personal account.
  • Set a date for transfers up to a year in advance.

From the mobile app

  • For secure signing in, use your fingerprints
  • Select the transfer/send option and then go for the transfer option
  • Select the business account you want to transfer from and then the type of account you want to transfer to.
  • Enter the number of funds or money you want to transfer
  • Enter the date on which the transaction is taking place and then tap continue
  • Confirm the details of the transaction, then make a transfer, and it is the end.

Frequently Asked Questions

Can I take money out of my business account for personal use? 

Business owners should not use a business account for personal use. It is terrible that can lead to other issues like legal, operational, and tax problems.

Can I transfer money from my LLC to my account?

If you are an owner of a single-member LLC, you do not get a salary or wages. This is called an owner’s draw. You should write a check or transfer the money from your LLC ‘c bank account to your account. 

Should I leave or keep money in my business account?

Your cash reserve and funds should be sufficient for you to run your business comfortably, as some experts advise having three months of expenses; others recommend 6 months to leave money in your business account. 

How do I transfer money into my business account?

Make a business checking account, determine the source of personal funds, transfer personal funds into your business, and record the transactions accurately in your accounting software.

How many days does it take to transfer money from the business account to a personal account?

Transfer money from a business account to a personal account will take 2 to 3 business days.

Can you transfer money from LLC to a personal account?

You have to write a check or transfer the money from your LLC bank account to your bank account.

Conclusion

I hope that the information discussed in the article will help you go through the procedures in which you can get payments, as a C corporation or S Corp shareholder, as an LLC member, as it is not an alternative for tax, legal advice, and professional financial institution. 

You should always be ready to ask the licensed accountant, tax advisor, and attorney for advice and guidance while establishing a business. How can you compensate yourself for the investment of money, time, and property transfer money from one account to another?