We have a 3 member LLC. 2 members are employees that get payed bi-weekly. What is the best way to pay them, W2 or guaranteed payments?

Of course your LLC needs to issues them W2s aslognas they are pure employees NOT members of the LLC; Although LLC members are considered self-employed for IRS purposes, LLC employees are not. You must file returns and pay payroll tax just like any other type of business entity that hired employees. Guaranteed draws are used as a substitute for a salary and ensure that a member,NOT an employee, that is running the day-to-day operations of the company is compensated for his services before other members receive payments out of profits.

Of course your LLC needs to issues them W2s aslognas they are pure employees NOT members of the LLC; Although LLC members are considered self-employed for IRS purposes, LLC employees are not. You must file returns and pay payroll tax just like any other type of business entity that hired employees. Guaranteed draws are used as a substitute for a salary and ensure that a member,NOT an employee, that is running the day-to-day operations of the company is compensated for his services before other members receive payments out of profits.