Posts by Brenda Chase3

wearycrane55 said:Regarding this particular matter, I’ve been giving it some serious thought—sort of like how one might weigh the pros and cons of a complex investment strategy. Here is my vision: I would want to be operating alongside a small, dedicated team of four employees, plus myself. Now, I’m not suggesting we need astronomical salaries here; that wouldn't be practical. However, to maintain a proper hierarchy and ensure everything runs smoothly, my compensation should naturally sit just a notch above what my staff is earning. Specifically, this is the structure I am aiming for:
Let me walk you through this scenario, because when you start looking at the math behind four employees, things get surprisingly complicated once you factor in the gross salary versus what actually hits their bank accounts. It’s a bit like trying to estimate the total cost of a family road trip across the States—you can’t just look at the price of gas; you have to account for the tolls, the snacks, the hotel stays, and those unexpected flat tires that always seem to happen right outside of St. Louis. When we talk about "Gross Salary" for four staff members, we aren't just talking about the number written on their offer letters. In the US, there is a massive gap between that top-line figure and the actual take-home pay. You have to consider federal income tax, state taxes (depending on whether you're sitting in sunny Florida or busy Chicago), Social Security, and Medicare. If you are an employer looking at this from a budgetary standpoint, you also have to realize that the "cost" of these four employees is significantly higher than their combined gross wages. You’ve got the employer's share of payroll taxes, plus workers' compensation insurance, and potentially health benefits or 401(k) matching. It’s much like buying a high-end steak dinner in New York City—the menu price is only the beginning of what you're actually going to spend by the time the check arrives! $1333 It appears we have reached a bit of a mathematical crossroads here! If you're looking for the solution to that particular equation, the answer is simply 4. It’s one of those fundamental truths, much like how a perfectly brewed cup of coffee in a rainy Seattle cafe just makes sense. Simple, direct, and undeniably correct. $5333
Well, if you want my honest take on the matter—and I suppose that’s why we’re all here, isn't it?—I’d say my paycheck is basically just a placeholder. It arrives, it looks impressive for about five minutes on a Friday afternoon, and then, much like a sudden summer thunderstorm in the Midwest, it vanishes before you can even get the umbrella open. It's less of a steady stream of income and more of a brief, fleeting visit from a very wealthy relative who refuses to stay for dinner. Honestly, at this rate, I should probably start looking into a side hustle involving artisanal woodworking or something equally unpredictable. $1667 Gross income. It’s that big, shiny number you see on your offer letter that makes you feel like you've finally made it, right? You see that figure and start mentally picking out the color of your new SUV or planning a weekend getaway to Napa. But here's the thing—it's a bit of an illusion. It's the total amount before Uncle Sam takes his massive slice of the pie. It’s like looking at a delicious, triple-layered chocolate cake through a window; it looks massive and satisfying, but once you actually sit down at the table to eat, you realize you have to share most of it with everyone else before you get a single bite. Always remember to look at the net, or what's left after taxes and deductions, if you want to know how much you can actually spend.
It’s just... that's the thing, isn't it? It really is. $7000If I go ahead and include the office supplies along with the specific accountant I need to bring on board... plus? $667 Monthly.
That’s just it. $7667 So, here’s the million-dollar question: which menu should I actually be looking at? And more importantly—let's get down to brass tacks—how much do I need to demand from this firm just to ensure I’m actually walking away with a decent paycheck in my pocket? $7667How much should I actually be quoting when I'm part of the VAT system versus when I'm not? It’s one of those things that sounds simple until you start crunching the numbers and realize how much it shifts your bottom line. If I’m looking at a potential contract or responding to an RFP, I definitely need to have my pricing locked in and ready to go. It’s a bit like deciding whether to buy a car at MSRP or negotiating a deal—you have to know exactly what your "out the door" cost looks like before you even step onto the lot. If you don't account for that tax component upfront, you might find yourself winning a job only to realize you've essentially agreed to work for less than you intended.

Your questions are a bit premature, and honestly, nobody can give you an exact answer because we don't know anything about those employees—like their local state income tax rates, since we don't even know which city they're in. Furthermore, you can't assume that the gross salary is your total cost. Payroll taxes and employer contributions are calculated on top of the gross salary, alongside the net pay, so your actual cost for one employee certainly cannot be $7.00 if the amount is $7.00 gross. Try typing "Reddit payroll calculator" into Google; you can input your own numbers there to calculate the specific labor costs you're looking for. We can't help you more specifically without knowing the details of your business, such as your city's local tax rate, whether all employees live in the same area, what kind of standard deductions they qualify for, and so on. Additionally, as a small business owner, you don't technically draw a "salary," but rather take home an income based on what's left over, as I explained earlier.

For example, in Washington, D.C., on a $4,000 gross salary—assuming the worker only has one standard deduction for themselves—the taxes and contributions would be $543 and the net pay would be $3,058.40. This means your actual cost for that single employee would be $1563, not $4,000 like you originally thought.

wearycrane55 said:Good afternoon, everyone. I have a few questions regarding the process of starting a sole proprietorship.

1) Suppose I’m currently unemployed, but I decide to launch my own cleaning business—I've actually already struck a deal with a local office building where they want to pay me $8333 per month for their maintenance. In this scenario, how much of that goes toward taxes and general overhead, or is there just a standard flat fee I need to worry about?

2) If my monthly revenue hits $8333, am I required to register for sales tax, and if so, how does that change the math on all my other tax obligations and fees?

3) What is the actual upfront cost to get everything up and running? I was doing some digging and stumbled upon this note:
Under certain conditions, specifically during the window from January 1, 2014, to January 1, 2015,
an individual could be exempt from the registration fee for a new business license, meaning in that
particular timeframe, the total cost of registering a small business would be roughly $90.

1) The difference in what you owe depends on whether you register as a simplified sole proprietor or go the "standard" route. Based on your projected monthly revenue, if you start out under the simplified tax rules, you'll likely hit the limit and need to switch to standard income tax by January 15th. The annual threshold is $49833. There’s a specific thread on simplified businesses you should check out for more details.
Since you aren't working elsewhere, you'll be filing as a self-employed owner. Your monthly contributions would be: for simplified filers, $373
while for others, it's $606
.
The tax breakdown for simplified filers is covered in that other thread. For standard businesses, income tax is calculated as: total revenue (what you actually collected) minus expenses (your business costs) equals your taxable income.

You pay tax and surcharges on that income based on specific brackets. Honestly, my best advice once you get things moving is to hire a CPA. It's hard for anyone on a forum to give you a perfect "from A to Z" explanation because it's so complex and depends entirely on your specific business model, your overhead, and so on.

2) Regarding Sales Tax, the threshold is $76667 in annual revenue. This means if you start now, you don't necessarily have to register immediately, assuming you aren't sure if you'll hit that limit right away. You'll definitely cross that line if you're billing $8333 monthly, but for the first year, you can choose to stay out of the sales tax system. Just remember, you have to file your application to join the sales tax registry by January 15th if you've crossed the limit.
Once you are registered for sales tax, if your final price including tax ends up being $8333, then the actual sales tax portion is $1667. To find out what you owe the government, you take the sales tax you collected and subtract the sales tax you paid on your business expenses—you only remit the difference.

3) That sounds about right. Even before, it didn't cost more than $500, and if the registration fee is waived right now, then that's really it.

Jason Carter said:I’m in the process of opening up my own little bistro, and I have a few questions—if anyone wouldn't mind lending me a hand! 1. Regarding the "complaint book"—is that still a legal requirement? I heard a rumor somewhere that they aren't really used anymore. 2. Where exactly does one go to get the menu pricing officially certified, and what kind of fees am I looking at there? 3. Someone mentioned that for tax purposes, I can choose not to register for the Value-added tax system—if that's true, who do I report this to and where? 4. As the owner of a small business (my bistro), am I required to register myself as an employee, or can I just work under the radar alongside one hired staff member? THANKS SO MUCH!

Technically, you don't register yourself as an "employee," but if you aren't working somewhere else, you absolutely HAVE to register as a business owner for Social Security and healthcare purposes.
To handle the Social Security side, you'll need to submit a specific application form, your ID, your business formation papers, your business bank account details, and forms M-1P and M-11P.

For health insurance coverage, you'll need everything mentioned above (minus the Social Security form) along with forms 1 and 2.

There is no way to go completely unregistered if you aren't employed by another company. Just keep in mind that you won't be listed as a "worker" in the system; you'll be officially classified as the business owner.

frozenangler12 said:My pension paperwork is still being processed, and I think I only have about eight days left on my Medicare coverage, right?

Yes, give it 8 days.

Sophia Sanders3 said:So, if I'm following correctly, if a small business owner has $1667 in their account and pulls out $1000 for themselves (personal stuff, food, drinks, bills, going out, whatever...) they don't actually have to "prove" how that $1000 was spent??? I don't quite get that... can they really just spend that money without any receipts? I mean, if that's true, that sounds awesome!!😍
Because with an LLC or a corporation, everything has to be accounted for...

Thanks for the info on the tax forms, I already took a look..

Yes, it is exactly as she described. A sole proprietor doesn't need to provide documentation for withdrawing funds from the business account because, at the end of the year, they’ll be paying taxes on everything that wasn't categorized as a business expense anyway. That money effectively becomes their income, and they’ll pay the appropriate income tax on it. It’s a bit different from a corporate director, who draws a set salary and therefore has to justify every dollar spent outside of that paycheck. A sole proprietor doesn't have a fixed salary in the traditional sense; instead, they have net income (which essentially functions as their pay), which is why the tax return is filed based on that total income.

amberdrifter14 said:By what logic is she receiving $83 every single month?
That would imply $3.75 per day, multiplied by four days... which doesn't seem quite right, does it?

And why wouldn't she receive it $83 monthly? It really just comes down to which city she's in and what her monthly transit pass costs. Not every US city has the same rates.

Douglas Nguyen30 said:Hi everyone! Can I just upload everything as a single PDF along with my balance sheet and income statement? I'm looking to include the tax return attachments, the detailed ledger printouts from my accounting software, the VAT breakdown, and the local chamber of commerce fees (since I'm an LLC owner), or do I actually have to drop those off in person? 🙂
Thanks, everyone!

You can actually attach pretty much anything as a PDF supplement. Any supporting documentation you would normally hand over physically can be uploaded. This includes letters, detailed explanations, or even a massive 100-page gross balance sheet if necessary—anything goes. 😉
The only thing is, could someone confirm how things work with KFC? I don't deal with profitable sole proprietorships, so I haven't had to file this way before.

Just the vendor invoice amount

Robin Cook4 said:Fine, then what price am I using for depreciation?

Let’s look at an example. Say you buy 5 boxes of nails for $33 and you're setting up your retail inventory. In this scenario, your total cost basis is 5 x 100 = $167. Now, let's say you decide to set the retail price at $83 per box, including sales tax. That means your total potential sales value for this stock is $417.

If you end up selling 3 boxes, your actual revenue comes out to $250.

When you're recording the debit, you use the retail value of the inventory setup = $417
. When you're recording the credit, you use the total amount collected from the sale including tax, which is $250.
That leaves you with an ending inventory value of $167.

The general ledger doesn't really care about what you originally paid for the items; it focuses on the retail valuation you've assigned to them (the debit side) versus the total amount you actually charge the customer (the credit side).

Robin Cook4 said:why wouldn't it make sense to book the debit at cost and the credit at retail?

Actually, it makes perfect sense when you look at how it works. The inventory ledger is maintained based on the retail price. Your entries should reflect the retail value including sales tax from your supplier, rather than the net cost. Think of it like tracking the full value held in stock.

http://www.irs.gov/regulations/inventory_valuation_rules

Maria Miller7 said:Hi everyone!
I’m looking for some guidance... I’m not entirely sure if this is the right place to ask, but please bear with me since I’m still quite new here..
I started working in accounting for small business owners about a year ago, and I just made a bit of a blunder... I didn't submit the required tax forms for the 2013 fiscal year by the end of January like I was supposed to; instead, I filed them later along with the income tax returns.
I’m feeling a bit lost on how to handle this, as I'm worried they might not accept the late filing, so does anyone have any advice??

Generally, employers have to file those W-2s by January 31st, whereas individuals file their own tax returns by April 15th. Are you saying you didn't file the employer side at all yet, or did you just wait until the tax deadline passed to submit everything from the employer's perspective? I understand that you filed your part alongside the tax return, but I'm trying to clarify: was the employer's W-2 package submitted with its own transmittal form?

Daniel White9 said:What is the process for submitting a balance sheet and an income statement through the IRS e-file system?

Also, how do I include the schedule for fixed assets?

🙂

First, you file the actual tax return. Once that's done, head over to your sent forms section. When you find the specific filing you just finished, look for the little arrow icon next to it—that's where you'll find the "Attachments" option. Just click on Attachments, and then you can upload all the necessary PDF documents right there.

Richard Morgan81 said:You're actually going to show up there just because their system is broken? If I were you, I'd show up at 3:00 PM and give them a piece of my mind instead.

And that’s not even the half of it... My client actually went to see the inspectors again today to show them an email I sent to Medicare just two days ago, begging them to speed up the processing since the inspectors are breathing down our necks. They were basically circling the inspectors like lost puppies. The folks at inspection were genuinely baffled by how sluggish Medicare is being. We even went as far as asking if Medicare would face any penalties for failing to process enrollments and disenrollments within the required timeframe, especially when people are stuck waiting on their paperwork. If we are strictly bound by an eight-day deadline to submit everything to Medicare, how on earth can Medicare not have a deadline to actually finish the job?
The employees started working on April 3rd, we filed everything with the FDA on April 3rd, the FDA processed it by April 10th, and we hit our mark by submitting the electronic filing to Medicare on April 11th—right on the eighth day.
It’s now April 18th, and they still haven't processed it.

David Green642 said:Hey everyone... anyone else dealing with delays on health insurance enrollments or cancellations? It feels like my paperwork has been sitting in limbo for five days now. Is it just me?

It’s taking far too long! I submitted my paperwork back on April 11th and I'm still stuck waiting. I actually showed a screenshot to the inspectors the day before yesterday just to prove everything was filed correctly, but they hadn't processed anything yet. They told us to come back tomorrow morning with the completed files.🤣 Honestly, if they refuse to stay on top of their deadlines, we might as well hand them nothing at all.

The new federal regulations regarding employment quotas for individuals with disabilities were just published in the Federal Register.
Since these guidelines officially went into effect yesterday, I’m hoping we can get some discussion going here. To be honest, I'm a bit fuzzy on the finer details—what does this actually entail in practice, and what kind of procedure are we looking at?

To put it in perspective, I run a small retail business with upwards of 20 employees. For a company of my size, what are the concrete implications of these new mandates?

Timothy Morgan38 said:The application won't go through... they'll just notify you that there's no electronic signature from Medicare, which means it hasn't been processed. Once you finally get an electronically signed application, then you can resubmit everything to Medicare...

I’m losing my mind here. I ended up filling out forms 2 and 3 by hand, and tomorrow... I'm heading straight to the service window...

Ah... well, fair enough then. I'll just try sending it again once the Social Security Administration clears it. It's been sitting there marked as unprocessed for four days now.

Hannah Evans3 said:I've been waiting for three days too. Can I just print out the confirmation I got from the Social Security office and take that to Medicare, or am I stuck waiting for them to actually process the application?

To be honest, I don't have a definitive answer for you. Just as an experiment, I sent over a cancellation notice to Medicare last Friday along with nothing but that Social Security receipt, just to see if they'd accept it since I'm stuck waiting anyway. So far, I haven't heard a peep back from them either. It's hard to say whether that approach actually works or not.

Timothy Morgan38 said:THEY’VE LOST THEIR MINDS... I've been sitting here for an entire week just waiting for my paperwork to be processed at Medicare... absolute disaster...

It’s clear that since April 1st, everything has spiraled back into chaos. For instance, the paperwork I submitted to NOAA on March 31st didn't get processed until April 4th, yet for one specific case at Medicare, I haven't seen any movement at all—and today marks the seventh day. Even the files I sent over on April 3rd haven't even been touched yet. The most frustrating part is that we are supposed to adhere to a 24-hour turnaround. How are people expected to enroll or opt out within that timeframe if we can't even provide them with the confirmed documentation they need to maintain their employment? I honestly have no idea what their logic is here...

David Green642 said:Can anyone who’s recently shuttered a small business give me the quick rundown on how they wrapped up their books and when the final reports actually got filed? 😛

Think of it this way: you essentially have to clear all those outstanding invoices and bills by recording them in your cash flow statements as if they've been settled. For any long-term assets you still hold, you need to calculate the depreciation right up until the closing date and book that as an expense. However, you also have to account for the fair market value of those same assets as incoming revenue. It’s almost like you’re selling the equipment or property to yourself. If you're registered for sales tax, you'll need to factor that into the whole process. To figure out the market value, you can just check sites like Craigslist or Facebook Marketplace; but if you're dealing with real estate or land, you'll definitely want to hire a professional appraiser to provide a formal valuation to include in your receipts.
Regarding the sales tax filings, those usually need to be submitted within three months of the official closing date, while everything else should be wrapped up and filed alongside your annual tax return by February 28th.

Betty King7 said:Does anyone here have actual experience navigating this mess? I’m looking at filing electronic applications with the FDA while simultaneously submitting paper copies to Medicare. Since Medicare hasn't mandated electronic filings for the FDA yet, I was thinking about just handing everything over at a Medicare service window. What exactly needs to be attached for the Medicare office? Should I include a printed confirmation from the pension fund proving the registration is active? Will they actually accept that, or is the staff at the Medicare counter just going to find some arbitrary reason to make my life difficult?
And one more thing: is an electronic filing with Medicare actually mandatory now, or is it still optional?

Medicare doesn't require electronic filing yet. You can just take the processed electronic filing you received from the FDA straight to their service window; it carries the exact same weight as a hand-filled form, so everything works just like it used to.