Posts by Anthony Cruz13

Thanks so much for getting back to me!

Hi there,
I run a small business that isn't registered for sales tax, and I need to issue an R2 invoice. I was wondering if I'm actually allowed to issue one under my current setup, and if so, are there any specific details or little things I should be careful about when putting it together?

Brenda Chase3 said:Why would you even consider an owner's loan if you have enough cash flow to just deposit the revenue? 🤷
There isn't anything stopping you from depositing your daily earnings whenever you want; you don't have to wait until the end of the month. Just deposit enough of that revenue right now to cover your current obligations—the same money you would have eventually deposited anyway—and then you can just settle the remaining balance at the end of the month.

Thanks for the advice—that’s actually exactly what I ended up doing. But looking at my other upcoming expenses, should I just pay those in cash, or is it better to transfer the money into my checking account first and pay through there? I guess I'm wondering, how much does it actually matter if the money goes through my bank account instead of being handled directly?

rowdyhawk25 said:To be honest, what your accountant is suggesting doesn't actually align with what you were saying in your previous posts. It seems like you might not be laying out all the facts, or perhaps there's a misunderstanding of how this works, which makes it impossible to get truly accurate advice here. Based on what she told you, it sounds like she's just reacting to your current cash flow situation. If your business account is looking pretty empty right now, she's giving you a solution based on your recent history rather than the bigger picture. You have to remember that the actual balance in your business checking account isn't the same thing as your official income and expense ledger.

Let me try to explain it this way—I didn't actually deposit money into the business account every single week. Instead, at the end of the month, I just totaled up all my revenue and made one big deposit into the account. I did the same with my expenses to cover my material costs. Like I mentioned before, it turned out that my expenses actually exceeded my total revenue, and the accountant told me that those extra costs just carry over into the next period. What I'm really trying to figure out is whether I should use a portion of my revenue to cover the payroll taxes, or if I should just take out an owner's loan. I was told the fees for a loan might be pretty steep, which worries me. Also, could you maybe explain a little more about how those expenses "carry over" to the next period?

rowdyhawk25 said:Since you've already paid them, the answer is no.

Thanks for getting back to me. So, I actually just finished chatting with my accountant, and she’s telling me that those specific costs won't be carried over if I set up an owner's loan—or whatever the official term is for injecting my own cash into the business. Basically, as the owner, I'd just transfer some funds into the company account. I have to get my payroll taxes and contributions sorted by the 15th, so I'm really curious what you all think. Is it smarter to just deposit some revenue into the account and pay from there, or should I go the route of the owner's loan? Or does it honestly not even matter in the long run?

rowdyhawk25 said:I think there's been a bit of a misunderstanding between you and your accountant,🙂. When people say those costs "carry over," it’s just a way of explaining how the math works out. In reality, you'll just see a seesaw effect—one month you might have high revenue and low expenses, and another month, like right now, you're facing higher expenses and lower revenue. At the end of the day, the IRS looks at everything on an annual basis. It all boils down to the total numbers for the entire year: if your total income exceeds your total expenses by December 31st, you've made a profit; if your expenses outpace your income, you've taken a loss. Everything balances out over the full fiscal year.

Okay, I get that part, but what I'm really trying to figure out is if "carrying them over" means I'm actually going to have to pay those amounts in future tax periods or not?

David Green642 said:How exactly do you think costs "carry over"? If you're talking about the invoices you've already settled, there shouldn't be any carryover. Maybe your bookkeeping is just messy?

Well, my accountant actually told me the opposite—that since my expenses are currently higher than my total revenue, I can only write off enough costs to match that revenue level. Anything beyond that, she said, basically carries over into the next period. It’s all those business expenses I’ve already paid out of pocket, but my current sales just aren't high enough to cover them yet.

Hey there, so here’s my situation. I run a small sole proprietorship for a market stall, and since we aren't registered for sales tax, things are handled a bit differently. Basically, we’ve had some business expenses that we paid for in cash rather than through a bank transfer, but I do have all the receipts to back them up. At the end of the month, it turns out our expenses actually outweighed our income, so those costs are being carried over to the next period. What I’m struggling to wrap my head around is why those expenses I already paid for are being rolled over into the next period if the money is already gone?