Hey everyone, I'm hoping there are still some active folks in here who might be able to lend me a hand. My question is this: is it okay for a small business owner to transfer funds from their business checking account over to their personal account—say, to cover material expenses? I'm mostly looking to avoid those pesky bank fees for withdrawing cash directly from the business account. Thanks in advance, and hope you're all doing great!!
Hey everyone, I could really use some guidance here. I’m working with a sole proprietor who is sitting on an outstanding receivable dating all the way back to 2012. To make matters more complicated—and a bit messy—the debtor company went through bankruptcy years ago and simply doesn't exist anymore. Is there a standard way to write this off or close out the debt in the books? The total amount is $667. Thanks so much for any insight!
Hi there! Quick question regarding small business accounting—is it possible for a sole proprietor to opt out of claiming depreciation expenses for the previous fiscal year if they want to minimize their reported operating loss? I know the depreciation has already been calculated, but I was wondering if we could just record it outside of our primary KPIs instead.
Hi everyone, I'm looking at picking up some tools from Amazon.com, but I've run into a bit of a snag—it looks like they won't let me pay directly from my business checking account; it's strictly PayPal or something similar. Since I'm running this as a small business, is it okay if I just use my personal credit card for the purchase and then record it in my books as a cash expense? I'd love to hear your thoughts on this! Thanks for the help!
urbanwalker72 said:Under the current regulations governing cash transactions, credit cards are treated strictly as non-cash instruments.
Exactly—and for businesses that track sales based on when they actually receive the funds, the sales tax isn't due until that money hits the bank account.
amberlynx said:Unfortunately, card payments are treated the same as cash transactions. The revenue is recognized at the moment you finalize the sale and issue the receipt. So, for sales tax purposes, it counts toward February.
I have to respectfully disagree with you there—if you take a look at the federal tax regulations, you'll see things work a bit differently. Let me paste the relevant section here for you: 2. INCURRENCE OF TAX LIABILITY REGARDING RECEIVED – PAID FEES
Section 53.
4. in the case of credit cards, the moment the transaction is approved by the bank where the taxpayer holds their checking account,
Brenda Chase3 said:If we are talking about someone with absolutely no prior work history—essentially their very first job—then you would use dependent code 0002 and income code 0001, with a duration set for one year. As for payroll taxes, they aren't assessed in this scenario. 😉
Honestly, thanks Brenda Chase3—you are always such a lifesaver when it comes to these details... hats off to you! 🙂 👍👍👍
Hey everyone! I’m really hoping there are still some folks following this thread who might be able to point me in the right direction... So, here's the situation: I'm under 30, currently working on a fixed-term contract—specifically a 12-month stint—and I'm receiving some employment support from the IRS aimed at helping people get their footing without prior work history. My big question is: what should the designations be for "dependent" versus "income"? Also, does Social Security tax apply in this scenario? Thanks in advance to everyone... Brenda Chase3 is truly hoping for some guidance here! 🙂
Keith Martinez5, I’ve included two links here that provide some context on how this works, though you can certainly find more information via a quick Google search. Essentially, the baseline remains a 40-hour workweek. The total monthly hour pool will naturally fluctuate depending on how many days are in the month according to the calendar, but the weekly threshold is what matters most. Whether an employee works a standard Monday through Friday, 8-hour shift, or follows a schedule of seven hours Monday through Friday plus five hours on Saturday, they are still hitting that exact 40-hour mark. In neither scenario would you be looking at overtime pay. You should feel free to report your actual hours worked, provided you don't cross that 40-hour weekly ceiling. For instance, if someone worked 7 hours on June 1st instead of their usual 5, they would hit 167 hours for the period, which would trigger 2 hours of overtime. However, 165 hours is simply the standard monthly allotment for employees working a six-day week who stay within their 40-hour weekly limit. 😉
Thank you so much! I'm certainly no "professional" accountant—I just handle my own books—but I really love double-checking everything because the last thing I want to do is make a mistake. Your advice truly means a lot to me... you're wonderful! 🙂 I can't get past the paywall on that first link since I don't have a subscription, but from what I can see, my calculations are spot on... TnX 🙂
Brenda Chase3 said:For employees on your specific schedule (7 hours Mon-Fri plus 5 on Saturday), the monthly hour requirement is actually 165. That means you aren't actually overworking or hitting an "excess" of hours; you are simply fulfilling your specific contract. You shouldn't compare your totals to the standard 160-hour quota used by people who work a straight 8-hour day, Monday through Friday. Your baseline is 165, so you should track your records against that number.
Thanks, >. One of my colleagues mentioned that this approach might be wrong—she suggested we should strictly stick to the standard labor pool and then log anything beyond that as overtime, or perhaps just "adjust" the hours to match the pool exactly. So, just to be absolutely clear—if I continue tracking hours this way and don't pay out any time exceeding the designated pool as overtime, am I technically staying within the rules?
Hey everyone! It’s absolutely sweltering out there today, and the forum seems pretty quiet—probably because everyone is hiding from the heat—but I figured I’d throw this question out there anyway, just in case anyone happens to be lurking. 🙂 I’m looking for some clarity regarding our timekeeping and scheduling... Here’s how we run things: we work a standard Monday through Friday schedule plus a 5-hour shift on Saturdays, which brings us to a total of 40 hours per week. The hiccup I'm running into involves those working Saturdays; specifically, in June, I ended up with 5 extra hours on my record. This is because the standard monthly hour requirement for June was set at 160, but with my Saturday shift included, I hit 165. I’m wondering what the best way to handle this is—is it better to just log it as a straight 5x8 schedule without the Saturday, or should we just let the employee take some time off once they've met their required hours? Also, how should we approach months where the required hours aren't quite met? For instance, the target for July is 184 hours, but based on my current track, I’ll only be at 181. I'd really appreciate any insights or explanations you all might have...
Brenda Chase3 said:I follow the exact same workflow, and whenever I file my annual tax return, I include a formal letter explaining it just like this:
"To whom it may concern,
In our tax filings, we have listed only physical cash receipts under the cash income section because we were instructed that, per IRS regulations, card payments are not considered cash receipts, even though they are handled that way under tax compliance laws. While these card sales are recorded through our POS system, they are reported as bank deposits in our filings since the funds are actually collected via wire transfer, much like any other electronic transaction.
We kindly ask that you keep this in mind when reconciling our cash receipts against our POS records. "
That is how my tax advisors told me to handle it; they always asked for an explanation regarding the discrepancy, so I just proactively write this to save myself the headache of being contacted about it every single year."
Brenda Chase3, thank you so much! I am honestly so relieved that someone finally gave me a concrete answer so I know how to handle things moving forward. I actually already had to correct a payment method entry once earlier this year, but now I’m going to revert to my old way of doing things since it makes the most sense to me—even if "logical" doesn't always align with what the official rules dictate here 🙂. I had no idea about adding that explanatory note, but I'll start submitting it along with my tax filings right away so they stop calling me... You're the best!👍👍👍
Hey everyone, I was hoping to pick your brains for a bit of advice regarding how to book credit card sales. Up until now, my process has looked like this: the invoice $33 is paid via card and recorded as a sale. Then, when the payment from the processor $32 hits my bank account, I record that as a receipt—and then I record the processing fee $1.75 as an in-kind receipt. At the end of the month, once I get the merchant statement for those fees, I record $1.75 the merchant's invoice and mark $1.75 the fee as an expense. Does this sound right to you all? If I’m off base, what’s the proper way to handle this? I know that under tax compliance laws, card transactions are treated just like cash, but according to IRS regulations, an invoice isn't technically "paid" until the funds are actually settled. It gets especially tricky for me when dealing with things like Diners Club installment plans, where I might be waiting 30 days for the money to land. Since I'm running a small sole proprietorship... Thanks in advance!
Hi everyone! I have a quick question regarding electronic invoicing... I’m working over at Silicon Valley, and we don't really bid on massive government tenders; instead, we pick up occasional jobs for a local municipal utility company—they just send us a purchase order when they need something done. So, here is my dilemma: are we legally required to issue an e-invoice for these specific goods and services? I’ve already signed up for the e-invoicing portal (it was an option provided by Silicon Valley, and I have my account set up too, though I personally prefer the e-invoicing platform because it allows for billing per invoice rather than the flat-fee model offered by my account system). Before I registered, my manager assured me there wouldn't be any issues sending e-invoices through the portal even if our partners were only using the my account system—but, as it turns out, there actually *is* a hitch, and the process won't work unless our partners are also registered on the e-invoicing platform... Does anyone have some clever advice on how to handle this? Just to give some context, we are a small business, so we're only looking at about 20 of these invoices total per year. Thanks, everyone!
Nathan Kim5 said:They actually phased it out starting this year, so if I'm reading this correctly, it's now just an optional attachment rather than being a mandatory part of the CDC form itself...
Hey everyone, does anyone know where I can find the Democratic Party attachment within the CDC form on the e-tax portal? I’ve gone through the whole form, but I just can't seem to locate that specific section—even though it's supposed to be a standard part of the CDC filing... For the other attachments, I know you just upload them as PDFs once you've submitted everything, but this one feels invisible... Any help would be much appreciated!🤷
Hi everyone, Has anyone here actually successfully submitted their payroll tax filings for a small business for January 2019? I tried running everything today—I followed all the guidelines provided by Microsoft to the letter—but when I try to process it for the sole proprietor, I just keep hitting an error wall. The system says: "For the total amount, the value in column 12 must equal the base amount divided by the number of days in the month multiplied by the number of insured days." Then it adds: "For the receipt code, the amount in column 12.3 must be equal to the product of the contribution base and the prescribed Social Security rate." "For the receipt code, the amount in column 12.5 must be equal to the product of the contribution base and the prescribed employment insurance rate." "For the receipt code, the amount in column 12.4 must be equal to the product of the contribution base and the prescribed occupational health insurance rate."
I’m honestly stumped—I don't see where the math is breaking down. I set the base at $5,491.20 with a combined 20% rate (15% + 5%), plus the standard 16.5% for Social Security... and I left the occupational health and employment insurance fields at zero. Thanks so much for any help!
Hey everyone, I have a bit of a question regarding depreciation calculations within our Microsoft inventory module. Back in March 2018, we picked up a vehicle for $3.25—just a heads-up, there’s no sales tax on the invoice since it was bought from a private seller who isn't part of the formal tax system, and the car was pretty banged up from an accident. Later on, in September 2018, we sold that same vehicle for $4.75, which includes sales tax. I went ahead and calculated the depreciation through September 30, 2018, coming out to $389. Now, here is where things get a little tricky: when I pull the DI report, the vehicle shows as 100% written off and the depreciation has been applied, but the purchase value seems to have jumped from $3.25 to $6277—essentially increasing by the amount of the uncalculated depreciation. Should I be recording that $2944 difference somewhere in the books as a base figure or something similar? Or is there a better way to handle this? Thanks a million for any help!!!
Edward Stewart said:I suppose we just sit tight and wait for someone with half a brain to show up. ☕
I actually can—I just got the official notice from HOK today. It reads, "Dear Sir/Madam,"
Yesterday, the IRS website posted an announcement regarding tax-free payouts for performance bonuses and other types of supplemental employee incentives. Under this specific rule, small business owners and independent contractors are also permitted to pay themselves these bonuses directly into their checking accounts, provided it's done by December 31, 2018.
Sincerely,
Secretary: John Doe
Downloadable files: SMALL BUSINESS OWNERS CAN PAY THEMSELVES TAX-FREE BONUSES.docx