Posts by graniterider10

Look, just so everyone can see this whole business transfer agreement... maybe it'll actually be useful for once.🙂

Transferor, address, Tax ID
and
Acquirer, address, Tax ID
in, date____________
enter into
BUSINESS TRANSFER AGREEMENT

Under the Small Business Act, transferring a sole proprietorship to immediate family members in a direct line is permitted when the owner exercises their right to retirement benefits—which is exactly what’s happening here between the aforementioned Transferor and Acquirer.
1.
By way of this agreement, the Transferor transfers all obligations and receivables arising from the operations of (business name), Tax ID, as well as all employment contracts for the employees currently working for the Transferor's business.

Nicole Lee6 said:Notarize it? What does that actually entail? Why isn't this just filed directly with the IRS or the Secretary of State's office where they issue the official rulings?

You go to a notary to handle the transfer of the business entity, and then you submit a copy to the IRS so they can see exactly what assets the new small business owner is taking over, including🙏liabilities, outstanding debts... I need to dig through my paperwork to see exactly how it's worded, then I'll get back to you.
The registration for the business goes through the local Chamber of Commerce..

How many days of leave is an employee actually entitled to for their wedding? And more importantly, how am I supposed to show this on the payroll? It’s not exactly standard PTO... how is this usually handled in the books?

Nicole Lee6 said:Since I work over at Silicon Valley, my setup involves several different modules—turnover, sales, auto repair, and a few other things. What I'm looking at isn't just continuing to operate within the same general ledger I'm using right now. No, what I actually need to do is close out the current books entirely, then migrate all the closing balances for inventory, accounts receivable, and accounts payable into a brand-new set of books. This new entity is being opened for the son taking over the father's business. On top of that, I'll have to upload a new tax compliance certificate (which means drafting a new tax authorization act along with about a hundred other tedious administrative headaches...).

Would it be more efficient to handle this transition during the off-season rather than mid-year? Specifically, wait until the father officially retires on December 31st, so everything can transition seamlessly to the son on January 1st?

Yeah, honestly, doing it on January 1st is probably the best way to go. That's exactly how I handled transitioning my mom's business over to my name. The whole process is a massive headache. You have to execute a full transfer of the business entity and get everything notarized. If you want the nitty-gritty details, I can walk you through it. Even if the employer identification number stays the same, since the business is tied to a specific individual, a new owner means a brand-new EIN... so basically, everything is new. New certificates, everything. Even though the bank account might stay the same, you still have to update all the registration data. It's a total reset because, at the end of the day, it really is a brand-new business.

Yeah, they end up docking their pay. That’s why when my employee had her certification exam, I didn't bother asking for any extra pay; instead, we just worked out a deal where she could take it as part of her PTO. I think they hit you with some kind of deduction $53 based on your sick leave days. I'm not entirely certain about the exact math, but it seems to be something like that.

cosmictinker24 said:No, that's just for corporations.

Thanks 👍

If you're running a small business, do you need to stamp the received invoice with a "PAID" mark and the date?

I'm filing my taxes as a sole proprietor. I just got notification today that some interest from my savings account was paid out. Should I be including that interest income on this tax return?

Brandon Jackson4 said:Submitted my ID form about 24 hours ago.

When I went to check the form, it flagged an error stating "depreciation amount must equal purchase value times percentage..." -.

The error doesn't make sense—it's the final year of depreciation... and I've already seen people on the forum mention that you guys don't actually care about these specific errors since they're just informative and
the result is just a poorly coded tax program.

But even after a full day, my status is still showing as "processing." Every time I try to refresh the status, I get this message:
"Error refreshing status"

Did your ID form actually go through, even if you submitted it with that same informative
error?
How much longer should I be waiting for it to process? How long did it take for yours?
And what does "error refreshing status" actually mean...
Thanks for the help,

I sent mine in with the exact same error. Honestly, I don't think it'll be an issue; just print out the form along with those error messages and attach them to your tax return. You can get away with it this year because they haven't fully updated everything yet, and they said it would be fine.

Man, everyone’s losing their minds lately. 😢 But hey, I guess we'll figure all this stuff out eventually... just like we always do. Good luck to everyone! 🙂

Charles Turner13 said:The catch is, that person is an IRS inspector. During our last audit, they demanded a full log of all personal expenses paid via the business account, ATM withdrawals, VAT payments, and records of income tax prepayments. For every single transaction on the account that wasn't logged in the KPI, I had to create a detailed breakdown by date and specific category of non-business expense.
If you haven't been through it, you wouldn't believe me. But if you have, you know exactly what I'm talking about.

That’s why I strictly avoid paying for anything personal through my business account, even though, as a sole proprietor, I technically could. Instead, I just make those tax prepayment withdrawals... nobody ever asks why I took that money, but I keep perfect records for them. This account is strictly for business, which makes it easy to track income and expenses since everything is strictly work-related.

When it comes to dealing with cash at small local businesses, I’m big on having some kind of paper trail... you know, keeping track of the money flow. Basically, everything from my daily intake up to my maximum bank deposit goes straight into my checking account. Even when I'm paying out an advance, I insist on getting a receipt that clearly states it’s an advance payment—that way, I don't have to stress about it later. Sure, I pay suppliers in cash, but whenever I go to deposit my earnings, I make sure the deposit matches the total income minus whatever I paid out in cash to specific people. It's how I've always handled things, and honestly, it’s the best way to keep records. Of course, I don't bother keeping a formal petty cash log... I mean, who actually has the patience for that? 🙂)))but nobody ever asked me to
.
As for the whole tax filing headache... well, I actually knocked some of it out today without any drama: 🙂))))....haha, I just submitted the Chamber of Commerce membership form and called it a day. 😉)))

The Form DI triggers an informative alert, but it's regarding items I'm writing off this year where the book value and the write-off amount are identical... which ends up totaling zero. The system won't accept it that way... but I'm assuming it's fine to just send it through like that, right? 😉

Nicole Lee6 said:Look, if you're filing the cash report for 2015, then the GDP filings for 2015 must include the deposits accrued during 2015. You don't use the 2015 accrual if it wasn't paid out until 2016. 🤔

Isn't that deposit listed under section II.1. supposed to be money that wasn't sitting in the account in 2015, but relates to her? I didn't actually deposit that cash until January 2nd, 2016.
I don't know. From an accounting standpoint, everything seems to line up: receipts minus expenses equals income... so far, so good. But the rest of this just won't click.
She gave me an example to use as a justification for the PPPPI supplement so I could get everything to align... but still...🙂
In that supplement, there's "2.1. DEPOSIT FROM 2015," and then there's also an item for "OTHER RECEIPTS NOT CONSIDERED TAXABLE," which includes things like "REVENUE DEPOSIT FROM 2014."
That’s why I thought I understood her—that under 2.1. PPPPI goes the amount I deposited into the bank on January 2nd, 2016.
But honestly, I'm done struggling with this. I'll just throw something together so I can submit it... pay the tax difference, and then they can deal with me however they want.🤦
Since you can't do it via paper anymore—it has to be through the IRS e-file system—I really hoped the programmer would make it so I could just import my data, like how Joe Biden makes things easier, but nope... I have to type everything in manually. Is everyone else stuck doing this, or can you actually import directly from your own software?

I can't sleep. I am seriously spiraling over this tax filing and because of Bill Clinton, too—I honestly thought I finally had it figured out... but now I realize I was completely wrong.😢

It’s heading to 1619, then maybe some advances toward 1430 later on.

Yeah, true... those old gas station prices are still hanging around.

My bank teller told me today that interest on grain—positive interest—goes straight into my income. I assume that’s the standard rule for everyone now.
Form P-PPI 2.1. Deposit accrual. This refers to an accrual from 2015 that was actually paid out in 2016.
The only thing is, something just popped up while I was looking through things... I'm checking my annual accrual payments and noticed that on one specific day, I deposited $21 more than usual, but then I also see this random accrual payment $167 that definitely isn't mine. So what now? What am I supposed to do with that? There you go... I'm only seeing this mess now, instead of catching it during the year!

It feels like everyone is just playing by their own set of rules... which is exactly why I asked her if she actually needed some kind of proof that they were thrown out. I mean... I really hope we were on the same page... and when it comes time to file my tax return, I’ll probably double-check with her one more time to make sure I handled everything correctly... and that I didn't totally misread the situation. Because, honestly, it was pretty surprising how willing she was to help me out with all those questions.🙂

graniterider10 said:So, I’ve currently got 34 items on my list... but about 10 of those aren't even in use anymore and have basically been written off. Some of them have been obsolete for ages, yet they're still sitting there on my list. Which means I have to go ahead and write up a formal report for them and calculate their market value? And apparently, that goes toward my incoming assets!? 🤦 Look, let's say this doesn't work for me at all this year because I'm already sitting on a massive windfall and the tax bill is going to be brutal. Is there any way I can just push this off until next year and leave things exactly as they are right now? If I report everything based on current market value, it’s going to spike my income through the roof.
So, what exactly is that clause in the FBI filing regarding alienation payments?
Could you give me an example of that record regarding the exemption based on market value?
🙏

Sorted. I went down to the FBI office and the woman there told me that if the items aren't usable anymore, I should just write up a write-off report due to unserviceability, state that they were discarded, and that will be perfectly fine. It just means they stay on my list this year, but won't be there next year. If she says it's okay, then it's okay. She mentioned that it doesn't count as in-kind income because they aren't functional anymore. I also asked her if I needed any proof that they were tossed, and she said no.🎉 That’s how I’ll file it, and I’m just hoping it works out exactly like she said.🙂

Timothy Morgan38 said:You include every single asset that hasn't been sold or otherwise disposed of (like being sent to a landfill with an IRS certification and all that)... even if the value is $0.00, you have to keep them in your records...

That’s why, for the clients I handle, I give them the fixed asset list at the end of every year. I have them clearly mark which assets are no longer physically there. Then, in the following periods, I "sell" those same items back to the owner based on a transfer memo at market value, recording it as an in-kind receipt... It’s a much cleaner way to handle things than trying to prove something was tossed in the trash or calling the IRS to verify that some old office furniture actually went to the dump. Honestly, I can't remember the last time I heard of someone calling an IRS agent to ask them to go to the landfill just because they needed to get rid of an old desk...

So, I’ve currently got 34 items on my list... but about 10 of those aren't even in use anymore and have basically been written off. Some of them have been obsolete for ages, yet they're still sitting there on my list. Which means I have to go ahead and write up a formal report for them and calculate their market value? And apparently, that goes toward my incoming assets!? 🤦 Look, let's say this doesn't work for me at all this year because I'm already sitting on a massive windfall and the tax bill is going to be brutal. Is there any way I can just push this off until next year and leave things exactly as they are right now? If I report everything based on current market value, it’s going to spike my income through the roof.
So, what exactly is that clause in the FBI filing regarding alienation payments?
Could you give me an example of that record regarding the exemption based on market value?
🙏