Posts by Emily Myers8

wearytrucker22 said:What kind of trouble is my friend looking at if an IRS auditor shows up? He runs a sole proprietorship and isn't registered for sales tax.
He does boat rentals and IT work (last year he cleared $100000 just from the IT side), but they ended up refunding $20,000 to a German client, claiming it was a mistake. (I have no clue how his accounting firm handles those kinds of corrections, but whatever—they just opened some LLC where the German guy will presumably pay that $20,000 again in 2023.

The boat rentals get booked through international agencies, local outfits, and hotels.

But his accountant is booking everything based on bank statements like this:
Money arrives via PayPal, so she issues the invoice to PayPal without a tax ID, or to Airbnb Payments, which is really just a financial intermediary used to move the cash.

She’s insisting I’m wrong and she’s right, but my take is that the invoice should be issued to the actual person who rented the boat, regardless of the fact that the money flowed through these financial institutions. I also don't get how she can book the gross amount when, say, Airbnb takes a processing fee—like 3% plus tax—and then issue an invoice for that. Is he even required to file sales tax returns under this setup?

What do you guys think? Am I losing my mind here, or is the accounting firm actually in the wrong?

If you're a sole proprietor, your total sales can't go over the threshold to be required to collect sales tax.
Just because money hit the account doesn't mean it counts as a sale; the ledger is what actually determines what constitutes revenue.
If he issued a refund to a customer, that buyer doesn't get a tax deduction for that amount—so is that even a good deal for them?
On what basis would that customer pay such a massive amount like $20,000.00 to a new LLC?

Quincy:

The boat rentals are booked through international agencies, local outfits, and hotels. But his accountant records everything based on bank statements, like money comes in via PayPal, so she issues the invoice to PayPal without a tax ID, or to Airbnb Payments, which is really just the financial middleman handling the cash.

An invoice is for the customer; banks or other organizations won't just write off their own costs or fees based on an invoice you issued.

Quincy:

She claims I'm wrong and she's right, but I'm telling her the invoice needs to be in the name of the actual person who rented the boat, even if the funds passed through those financial institutions.

Obviously, it should be in the customer's name.

Quincy:

I still don't get how she books the gross amount when, say, Airbnb takes a processing fee of 3% plus tax. Does he have to file sales tax returns for that?

For a sole proprietor, that's not really a factor; it's the incoming revenue that matters.
Once he switches to an LLC, then that becomes a deductible expense.

Quincy:

Who do you think is right, me or the accounting firm?

You are, for issuing the invoices. 👍

cosmictinker24 said:So, we’re looking at this Synesis software again. Their instructions say to log every single unpaid bill from 2022 into the IRU and URU, regardless of when they were actually due. I guess if you enter them that way, the system just shuffles them over to 2023, but then everything shows up in dollars. Then there's the part about the 2023 bills—apparently, you can record those in Q1 using dollars because the sales tax for that period has to be in dollars too. But wait, what happens with the invoices issued in Q1 that were already paid in dollars right away? It’s all a bit messy. If I follow this, I’ll end up with a closed set of books where some accounts are settled in dollars and others in something else entirely. It’s confusing, honestly.

Just ignore those instructions. It’s totally different for a sole proprietor reporting income versus a corporation issuing service fees or whatever.
Sales tax for Q1 '23 on stuff from late 2022 was handled in the old currency, but everything after that is strictly USD.
Any invoice entered from January 1st, 2023, onwards is in USD—no exceptions.

cosmictinker24 said:Hey everyone.

So, regarding those invoices issued back in December 2022 where the payment isn't actually due until January 2023... they were logged in the IRS for 2022, but then the software automatically pushed them into 2023 and converted everything into dollars. How on earth am I supposed to close out those specific accounts? It’s saying services performed in 12/22 have to be closed out in USD?

If you're running a sole proprietorship, any unpaid outgoing invoices aren't considered actual income yet, so you don't report them to the IRS for sales tax purposes.

Quincy:

How do I close out those accounts? It says services completed in Dec '22 need to be closed in dollars?

What you're seeing doesn't apply to sole proprietors; that's more for corporations paying corporate tax.
An outgoing invoice counts as revenue regardless of whether you've been paid, so it goes into the current fiscal year in dollars, while the outstanding balance gets carried over to the next year in dollars.

stormybadger8 said:How did you even decide this was a sole proprietorship, let alone figure out their net profit or what their 2022 revenue looked like? 🤔

The thread title is fine, I guess, but people just spout random stuff in every single discussion...
So, there's no way to know if that answer is actually right, considering you have zero data on their actual turnover...

I try to keep track of who asks what.
This question was posted back on April 14, 2022.

redmason4 said:Hey everyone, I could really use a little help if anyone has a sec 😵 just to see if my math actually adds up 😬

So, I run my own thing as a sole proprietor here in the States, and I’m about to hit that $250,000 threshold

Here’s the scenario I'm looking at:
Let's say my total annual revenue hits $133, which means I've officially blown past the $100 mark.

Based on how I'm seeing it:

- I'll have to register for sales tax and pay monthly or quarterly—is that basically just an advance on my year-end tax bill or what?
- Since my work falls under that "artistic services" category, I get a 25% deduction... so if we're talking $400,000, taking off 25% leaves me with $100
- Then, on top of that $250,000 baseline, I've got all my business expenses—let's say $3.25 in deductible input receipts
- That leaves $97, and since my total gross was over $360,000, am I stuck with a 36% tax rate?

So, if the annual tax is 36% of $290,000, that would mean $35...?

Am I tracking this correctly, or is there some other crazy tax rule I totally missed...

Thanks 😍

And here is my answer to those questions.

A small business owner making a profit can choose how they handle their fees, which counts as income—just like in this example, where it's based on those collected fees.

redmason4 said:Hey, quick question—for invoices I sent out back in 2022, but didn't actually get paid until sometime in 2023... which year does the IRS count that as income?

Thanks.

Income counts when you actually get the cash, and expenses work the same way.

Nathan Kim5 said:To put it simply, it's because their total deliveries exceeded $100 and they received an official notice from the RNC.

Like I mentioned before, while they were operating under the flat rate, they pay that specific amount, but starting from the first of the month they begin keeping formal business books, they switch to paying standard self-employment income tax... I really don't think I need to keep repeating myself here.

Believe it or not, there are actually scenarios where you can be part of the sales tax system while still being a small business owner on a simplified tax plan... In this particular case, that isn't what's happening, but I really want to convey just how incredibly complex this whole legal landscape can get, which makes our colleague's situation one of the most straightforward ones out there... Any other accountant or tax advisor you talk to will tell you exactly what I'm saying is correct...

From what I get, you just notify the IRS or your agent via message or call once revenue hits $100000. If the IRS already issued a ruling for flat taxation, does that ruling need to be canceled? I already asked this, but I'll ask again—if it needs canceling, is there a specific process? If so, the basis would be filing an SD for the period when they still qualified for the flat tax. Anything over 300,000.00 counts as taxable income from the moment they started keeping books, and any expenses tied to that income are deductible.
In my experience, the IRS doesn't care if you know your rights, hire a pro to manage your business, or just wait until the end of the year and claim you didn't know or were misinformed without proof.
At the end of the day, taxpayers are expected to know the rules, or they're just looking at a fine.

Quincy:

Believe it or not, there are actually scenarios where you can be in the sales tax system and still be a small flat-tax business at the same time.

Obviously, there are different ways to handle sales tax versus those who aren't even required to collect it.
Usually, a solo entrepreneur isn't aware of these obligations, so they end up getting hit with a penalty and a massive bill they never planned for.

Quincy:

It’s not the case here, obviously, but I'm trying to show how insanely complex these laws are. This user's situation is actually one of the simplest ones out there. Any other accountant or tax advisor will tell you exactly what I'm saying.

The bookkeeper here can confirm it, and the IRS will back me up too. Just post the response from the IRS right here.

Nathan Kim5 said:Let me try to break down the whole process one more time just to be clear... You have to file the SD by January 15th, regardless of when the business owner officially started generating income, and in this specific scenario, it covers the period from January 1st through August 31st. Then, the annual tax return is due by February 28th for the full year, but in section 4.3.1.1, you only report the business income earned from September 1st to December 31st—which is when they started keeping formal books—plus the difference between their total receipts and the amount over $100 earned up until August 31st. The SD is sent for the amount of $100, showing the flat tax obligation for the highest bracket pro-rated for those eight months... On top of that, if there's any remaining balance for the flat tax, that needs to be paid too. If there happened to be an overpayment sitting in account 1449, you can manually transfer those funds to account 1430 or 1619 if needed, though the system doesn't handle those transfers automatically...

What's the basis for the IRS to cancel a flat tax assessment?
How can someone be registered for sales tax if they were paying under the flat tax system?
The tax might stay the same as last year or even go up depending on the previous year's revenue, so that determined tax gets paid once they meet the requirements to register with the RNC.
Just a heads up, 1430 and 1619 aren't the same thing; prepayments toward the tax are made to 1430 until the annual return is filed.

Nathan Kim5 said:The SD is submitted just like any other filing by January 15th, but the flat-rate income tax obligation is calculated proportionally for those eight months. You can't have two different tax payment methods running simultaneously, but that isn't actually the case here; rather, from January 1st through August 31st, the taxpayer is under the flat-rate system, and then from September 1st through December 31st, they transition to keeping full business books.
I'm guessing you aren't coming from an accounting background, so you probably haven't run into a situation quite like this before, but honestly, this is pretty routine work for us, and those of us who handle this professionally deal with several cases like this every single year where we file both the SD and standard income tax for the same taxpayer, so I really do know what I'm talking about...🙂

Filing a regular return isn't the same thing as filing when someone changes their tax status. Once the SD form is submitted, the old ruling is voided and it gets updated in the RNC; you can't be taxed under two methods simultaneously.
They pay via SD, settle the difference for the current year, and the monthly amount becomes a tax prepayment for the next period.

Making assumptions about people isn't the point here and you shouldn't bring it up. You could have just answered the question and explained why this is routine business—it wouldn't have been that hard.

Nathan Kim5 said:Your status shifts once you submit the necessary sales tax filings and the official reports, after which the IRS issues a new determination, but honestly, that's not really what we're debating here. The person explained they were under the flat tax regime until August 31st, and then switched over to standard income reporting and sales tax requirements starting September 1st. We have to assume they reported everything accurately and received their updated notice. I already went into detail above regarding how to handle this specific scenario involving SD and CDC, specifically which portion of the receipts goes toward the SD and which part belongs to the CDC. In 2023, those prepayments will naturally be applied strictly as income tax credits (Account 1430) rather than flat tax credits (Account 1449), but you still have to settle any remaining balance on Account 1449 if there's a discrepancy based on what was filed in the SD forms...

So when does the SD get submitted in this scenario?
If there's just one SSN involved, you can't be paying taxes under two different systems at the exact same time.
Nobody mentioned anything about official rulings being out yet, so I think our assumptions are pretty much spot on.

Nathan Kim5 said:Actually, that isn't quite right. You submit the SD based on an amount of $100 by August 31st, and then you pay the flat tax for the highest bracket proportionally for those eight months. Then, in the CDC, you report the business income from September 1st through December 31st, which also factors in any excess income over $100 earned before August 31st. Furthermore, if you held a standard W-2 job alongside your business at any point, you have to disclose that non-self-employment income and the income tax prepayments made on it in the CDC (following the IP form)... If there was employment alongside the business for part or all of the year, the CDC also requires calculating social security contributions at the reduced rates based on those specific months and the highest base, while you'll also still need to cover the contributions for the sole proprietorship itself... You'll eventually get a formal notice from the IRS, but by the time that arrives, they've likely already tacked on interest, so it's better to just settle up immediately...

First off, you pay the flat tax according to the ruling, and to change your status, that ruling actually has to be rescinded through the proper channels. Basically, what you were paying monthly as a flat tax turns into an income tax prepayment that gets settled when you file your final tax return. There's nothing in the rules saying otherwise.
Income tax prepayments are just based on whatever the total amount was under that flat tax setup.

Lisa Myers27 said:I appreciate the input, but I don't think that's quite right...
My business was technically a sole proprietorship until August 31st, so there's no doubt the SD applies to that specific timeframe.

If you haven't received a formal notice about canceling your flat tax, you can still submit an SD form for the 2022 period from Jan 1st to Aug 31st.
Just enter the income amount allowed by the form; the tax difference will hit the maximum anyway, so it doesn't really matter if the income was $299,999 or $356,782.
I honestly don't see the point in filing an SD form if the law forced you over into standard corporate bookkeeping, but it's probably worth asking your IRS agent just to be safe.

Lisa Myers27 said:Hey everyone...

I’ve been handling my own bookkeeping for my small business, and now I need to file my annual forms, specifically the SD and the CDC (per the instructions from the agent when I registered for sales tax).

I have two questions here, just in case anyone else finds themselves in this exact same spot:

1.
Back in August, my revenue crossed the $300,000 threshold, so I was told my sales tax registration would kick in on September 1st. As of August 31st, my total receipts were sitting at roughly $350,000.
The agent also mentioned that I need to submit the SD covering the period from January 1st through August 31st.
However, every time I try to file the SD through the IRS portal, I get an error message the second the total amount exceeds $300,000.

What am I supposed to do?

2.
I took a look at the CDC form as well...
Do I really have to fill out EVERYTHING on there? (Keep in mind my business isn't my only source of income—I still have a regular W-2 job elsewhere, etc.) Or am I only responsible for the section pertaining to the business itself? (Looking at the whole thing, it feels like a ridiculous mountain of numbers and data points to track down)

Anyway... if anyone has any insight, thanks a ton in advance! 🙂

The SD is specifically for sole proprietors under certain tax rules, which isn't your situation anymore since you hit that limit.
Income tax reporting is annual, even if your operating period was shorter.
You'll need to submit the CDC form covering all income received in 2022, from 01/01/2022 to 12/31/2022.
You include your salary, pension, business income, and any other side income.

Edward Stewart said:I truly appreciate everyone taking the time to respond to my inquiry.

That bolded section has me feeling a bit perplexed; if that's the case, wouldn't the KPIs (or specifically the designated work orders and Ira filings) be mathematically inconsistent? It seems as though dollar amounts would be getting tangled up with the first month's invoices, which are all in euros.
Or is this distinction merely a matter of how things look on paper?
I personally rely on an application that automatically syncs transactions—pulled directly from my bank statements—with specific line items in the KPI, so any printouts I generate come straight from the software rather than being manually entered.

Entries in the business books for invoices through Dec 31st will be in dollars, but since the contributions for December won't be paid until 2023, they'll be entered based on the statements in dollars as you mentioned. They aren't considered expenses for 2022 and shouldn't be recorded for last year—just the bills that have actually been paid and settled.

Gerald Chavez7, imagine being stuck in a coffee shop where you can only talk about what's actually on the menu.
If someone posts something that doesn't get a response from anyone else, we could just let it go. Honestly, if someone comments on a post, who's actually going to complain about a discussion ending? As long as nobody's being rude and we keep things civil, it's fine.
If everyone actually understood what people were saying, we wouldn't even need to post half this stuff.

Kanye West said:It’s honestly hilarious how they just ban everyone who actually keeps things interesting and dynamic. Then, predictably, the threads just die out because nobody wants to comment when they know any real discussion is going to be shut down.
So, boldcanyon14 just banned me from the economics section over a thread about foreign labor. Man went totally off the rails—banning people, deleting posts, and finally killing the whole thread because he couldn't force everyone to parrot the official narrative about importing workers. 😁
Honestly, it’s obvious from an airplane view that their whole job is just suppressing information and spinning the narrative to suit themselves.
They need to let people speak, otherwise this forum is pointless. They want to control the conversation and spin it their way, but it won't work—forum users aren't toddlers; we're adults who don't fall for that stuff. Now they're stuck because the forum is losing its soul and dying off with every banned member, yet they still want to keep it alive because it's useful for the government and intelligence agencies to spy on what people are thinking.
All that effort was for nothing... like they say, it's a lost cause.

Regarding everything you wrote in those threads and here in the lounge:👍
My persecutor basically decides on a disciplinary action all by himself. Of course, nobody actually checks if it's fair; I guess that's just his "reward" for volunteering.🤦
In my case, aside from that one specific moderator, the rest of the mod team hasn't given me a single warning, card, or ban in six years. So how is it possible that everyone supposedly needs to agree on a disciplinary action?
If that were true, the process should at least be transparent to the person involved.
I haven't changed my way of writing.
Maybe the relationship between a moderator and the member they're targeting needs to be more clearly defined.
And moderators should at least be decent when talking to members.
If anyone needs to see the latest organized attack by "The Master," I can send it to whoever asks. Posting it here in the lounge is useless based on my experience.

Edward Stewart said:I am currently getting everything squared away for my upcoming payments—specifically the payroll taxes for December 2022 and the sales tax for the fourth quarter of 2022. ("dohodaš").
I noticed a notification on TurboTax indicating that the sales tax forms need to be filled out in Kuna (which implies the same for the URa?), but I haven't quite managed to track down the specific details or a helpful example yet.
Since all payments are transitioning over to the Dollar now, does that mean I have to manually convert everything from Kuna before paying? Is there anything else I should be keeping an eye on during this transition?

Payroll taxes go into the system in dollars, while the books and income tax filings stay in dollars too.

TurboTax shows a notification saying the sales tax form needs to be filled out in USD (so does the other one?), but I haven't found any specifics or examples yet.

Just look at how you entered everything for Q1 through Q3.
The Q4 sales tax payment should be in dollars.

Since all payments are in dollars now, do I need to convert everything from my old currency to pay? Is there anything else I should watch out for?

Check the FARC report before paying the sales tax, then just pay what the FARC says.

Casey Bennett said:pzec, here is your contribution to the mobile technology PDF regarding the topic of Visa mobile banking.

Look, I'm clearly the idiot here who doesn't grasp your massive craving for attention, which is so intense that you end up posting complete nonsense in totally unrelated threads.
No matter which topic you stumble into, you immediately start ranting about your frustrations with this forum. Get it together and stop ruining discussions for everyone else. At least not in this space.

Eeto, I'm just an idiot who doesn't get your desperate need for attention, which is why you keep posting totally random nonsense in different threads.
No matter what topic you jump into, you immediately start venting your frustrations about the forum. Just chill out.[/I]

Having power is the one thing you shouldn't brag about.
Again, you're saying that I'm just rambling. Give me an actual example of when I'm rambling; maybe I just don't get it and can explain myself.

The stuff about JPMorgan Chase was just a response to your specific post here

The Visa team is basically working two people for the price of one. The pay is so low that anyone who can leave does, and the new kids who fall for those sweet-sounding job ads end up quitting after just a few months.
Yeah, be happy the app even works. Don't go asking for decent error messages yet.

That was your post, so my comment was just a reaction to it. Your message was basically "stay away from JPMorgan Chase," right? Or did I miss the point?

Casey Bennett said:Casey Bennett, your comparison is total garbage.

If we’re actually going to use analogies, this whole situation is like some lunatic breaking into a Home Depot every single day demanding a stuffed unicorn, taping pictures of stuffed unicorns all over the aisles, and picking fights with the managers and customers who try to tell him that a hardware store isn't where you find plush toys—all while stubbornly refusing to leave until everyone concedes that the stuffed unicorn absolutely belongs there and that anyone saying otherwise is lying.

So, after days of relentless arguing and explaining that a Home Depot is not a toy store, and that they don't carry unicorns and never will as long as the sign on the door says "Home Depot," the staff finally hit their breaking point.
They essentially kicked that unicorn-obsessed maniac out the door, sent him straight to the nearest Toys "R" Us, and banned him from ever stepping foot near a hardware store again.

There, it's not that hard to grasp.

My take is more like an ungrateful shop owner badmouthing a regular customer, or a moderator publicly pointing out how @Kerefek76 can't post because of some supposed bias. Honestly, who cares? Why would a mod even bring that up? It just feels like a power trip, flexing muscles when there isn't even a reason to.

@Kerefek76, like everyone else here, is a valued member who's put out endless pages of content; whether what he writes is "true" or not shouldn't matter.
That's how most members are treated—instead of getting a thank you, people who write "complaints," as the powers that be call them, get persecuted.
People should prove themselves through actual debate with other members, but those debates get shut down by mods who don't seem to grasp what people are even saying.
The bottom line is that the community vibe the owner promised has completely missed the mark.
Forcing users to dig up stuff written 15 years ago as if it's some sacred value is weird. Today is a new day and a fresh chance to share an opinion or make a point during a discussion.
I explained my point, so now that you get it, can we move on, or is the verdict already set in stone regardless of the debate?

It’s like that time you were posting about JP Morgan Chase and whether their tech support was bad.
You didn't catch my drift, I got a warning and then a ban—thanks for making me want to avoid this forum entirely.

briskdrifter3 said:It’s been over six months since I was hit with that partial ban regarding the coronavirus topic.
Is there any way to have that restriction lifted?

Comparing this to the post I linked—it's basically like shopping at a small local corner store every single day. The owner just sits there gossiping with the staff about how you're such a sucker for paying their prices when you drive right past a massive Walmart every morning.