Accounting for Sole Proprietors: Tax & Bookkeeping Tips

Hey everyone.

Quick question—how should I record an IRS refund for my salary in the books?

Thanks.

cosmictinker24 said:Hey everyone.

Quick question—how should I record an IRS refund for my salary in the books?

Thanks.

Outside GDP, at least that's how I interpreted it.🙄

casualorca5 said:Outside GDP, at least that's how I interpreted it.🙄

Alright, thanks.
And what about the small business owners? I mean, he applied for relief for himself, too... but then he isn't even paying himself a salary. It’s all a bit messy, I guess.
What can even be done with his share, really? And more importantly... how am I supposed to book that? I guess there might be a way, but honestly, it sounds like a headache. Maybe.

cosmictinker24 said:Alright, thanks.
And what about the small business owners? I mean, he applied for relief for himself, too... but then he isn't even paying himself a salary. It’s all a bit messy, I guess.
What can even be done with his share, really? And more importantly... how am I supposed to book that? I guess there might be a way, but honestly, it sounds like a headache. Maybe.

So, he could just transfer it to his personal account as income, or maybe just leave it sitting in the business account... honestly, it doesn't even go on the books either way because it’s not an actual expense or a deductible cost. The IRS would basically just say the funds were used for what they were intended for—keeping jobs afloat.

Brandon Walker6 said:So, he could just transfer it to his personal account as income, or maybe just leave it sitting in the business account... honestly, it doesn't even go on the books either way because it’s not an actual expense or a deductible cost. The IRS would basically just say the funds were used for what they were intended for—keeping jobs afloat.

Thanks so much for clearing that up. 😁
I'm wondering, though... is it actually okay that he received this support from the IRS while simultaneously forcing me onto mandatory vacation? It feels wrong. Like, the government is essentially paying my wages, but I’m burning through my PTO for something I didn't even cause. My boss hasn't paid me in two weeks, so I'm just left trying to make ends meet... I mean, there's money available, but why wouldn't we just take what the state is offering? They could just bridge the gap to my full salary and things would be fine. If I end up staying on, I'll have used up all my vacation time and then I'll be working like a dog until next summer. It's just a miserable situation, honestly.

cosmictinker24 said:Thanks so much for clearing that up. 😁
I'm wondering, though... is it actually okay that he received this support from the IRS while simultaneously forcing me onto mandatory vacation? It feels wrong. Like, the government is essentially paying my wages, but I’m burning through my PTO for something I didn't even cause. My boss hasn't paid me in two weeks, so I'm just left trying to make ends meet... I mean, there's money available, but why wouldn't we just take what the state is offering? They could just bridge the gap to my full salary and things would be fine. If I end up staying on, I'll have used up all my vacation time and then I'll be working like a dog until next summer. It's just a miserable situation, honestly.

Maybe not...
Tons of people I know—myself included—are stuck getting absolutely nothing.
It’s the same old broken system: if you actually worked hard since the start of the year, they basically pretend you don't exist. If your revenue is higher than last year (unless you're in the restaurant business), you're disqualified. It's ridiculous.

That hits pretty much everyone tied to construction. This year was great—really great—because the weather stayed warm, so we were working way more than last year. We had the same thing happen last year with October, November, and December, where we collected a huge chunk of payments all at once in January.
Because of that, you can't claim a dime because your revenue looks significantly higher than last year, when the rule says it needs to be 20% lower...

I'm all set, since sales tax isn't due until payment is collected.
Along with my sales tax return, I’ll be submitting the UN ledger through the IRS portal.
I have a question about how invoices should be entered into the UN (IRS electronic system):
Should they follow the invoice date or the actual payment date?

In the physical paper ledger for incoming invoices, I record them by the invoice date, but for this digital version, it feels more logical to list them based on when the bills were actually paid.
Or does it not really matter?
Thanks.

Brandon Jackson4 said:I'm all set, since sales tax isn't due until payment is collected.
Along with my sales tax return, I’ll be submitting the UN ledger through the IRS portal.
I have a question about how invoices should be entered into the UN (IRS electronic system):
Should they follow the invoice date or the actual payment date?

In the physical paper ledger for incoming invoices, I record them by the invoice date, but for this digital version, it feels more logical to list them based on when the bills were actually paid.
Or does it not really matter?
Thanks.

The order doesn't technically matter, though you should still stick to the issuance date.

Got a question here, hoping someone can weigh in. I run my own small business and I'm stuck on how to track income. Let's say back in February I processed a payment for $33 using Diners Club and issued the receipt right then. Now, Diners Club doesn't actually drop that cash into my account until March. So, is that money technically revenue for February since that's when the sale happened and the receipt was printed, or is it March revenue because that's when the cash actually hit my bank? Thanks a ton...

Thanks, Wand1

urbanwalker72, thanks for the reply, but I'm still a little confused.😵
Basically, I track my paper purchase journal based on the invoice date, which seems fine.

But when I'm filing my electronic UN, I report those incoming invoices in the order they were actually paid.

So here's the question: when filing the electronic tax return, should those input invoices be reported by their issuance date or by the date they were paid?
Thanks.

Brandon Jackson4 said:urbanwalker72, thanks for the reply, but I'm still a little confused.😵
Basically, I track my paper purchase journal based on the invoice date, which seems fine.

But when I'm filing my electronic UN, I report those incoming invoices in the order they were actually paid.

So here's the question: when filing the electronic tax return, should those input invoices be reported by their issuance date or by the date they were paid?
Thanks.

By the payment date. They need to match the data on the sales tax forms.👍

Hey everyone,
So, I'm stressing out about filling out the JOPPD regarding that job retention grant we got—should I have just filled it out normally, like I was paying out full salaries? I went ahead and paid the difference for the payroll taxes... but now my math is all messed up because it looks like I’ve overbooked the forms compared to what I actually paid in taxes. Or am I supposed to just fill out the JOPPD based on the gap between the grant amount and the full salary?

Olivia Cruz86 said:Hey everyone,
So, I'm stressing out about filling out the JOPPD regarding that job retention grant we got—should I have just filled it out normally, like I was paying out full salaries? I went ahead and paid the difference for the payroll taxes... but now my math is all messed up because it looks like I’ve overbooked the forms compared to what I actually paid in taxes. Or am I supposed to just fill out the JOPPD based on the gap between the grant amount and the full salary?

You did it correctly.👍 The Department of Defense and Health and Human Services settles the tax issues, while Regus handles the payments to the IRS.😛

I can't believe I'm even seeing this... seriously? It’s like some people just wake up and decide to be completely out of touch with reality. You see these kinds of takes floating around and you just have to wonder if anyone is actually paying attention to how things work in the real world. It's honestly exhausting.

casualorca5 said:You did it correctly.👍 The Department of Defense and Health and Human Services settles the tax issues, while Regus handles the payments to the IRS.😛

Thanks for getting back to me!
Just wanted to jump back into this thread real quick—I actually called up Regus in Washington, D.C. to get some clarity, and honestly, what they told me was such a headache. They basically said that the first part of my Social Security won't ever be paid out—like, never—but they’ll still count the years toward my total service time. As for the second part? Apparently, the IRS is going to handle those payments. The rep basically told me to just leave everything exactly as it is right now and stop stressing, claiming that maybe, just maybe, one day it'll all even out on my benefits statement. Such a vague answer, right? Typical.
I swear, I am getting bombarded every single day by notifications from the IRS telling me to link my payments with the payroll filings ASAP. Like, seriously? Give me a break! It’s like they think I just sit around waiting for them to nag me. Honestly, what kind of country are we even running? This level of micromanagement is absolutely insane—it's like having a debt collector breathing down your neck every five minutes for stuff that should be automated by now. Total joke. 👎

Is there any way to dodge paying sales tax to a domestic supplier if the goods coming through my business are just being shipped straight out to another country in the European Union?

If it’s possible, what’s the actual process for pulling that off?
Thanks

Thomas Walker3 said:Got a question here, hoping someone can weigh in. I run my own small business and I'm stuck on how to track income. Let's say back in February I processed a payment for $33 using Diners Club and issued the receipt right then. Now, Diners Club doesn't actually drop that cash into my account until March. So, is that money technically revenue for February since that's when the sale happened and the receipt was printed, or is it March revenue because that's when the cash actually hit my bank? Thanks a ton...

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.

neonsurfer13 said:Is there any way to dodge paying sales tax to a domestic supplier if the goods coming through my business are just being shipped straight out to another country in the European Union?

If it’s possible, what’s the actual process for pulling that off?
Thanks

As far as I know, there isn't a way to bypass that. Even if your goods are destined for export, you're still responsible for paying sales tax to your local supplier.
The logic is pretty straightforward: your supplier has to pay the government tax on the sale they made to you, and they have no way of knowing where you're shipping the items next or who your end customer is...

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,

Keith Martinez5 said: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,

Under the current regulations governing cash transactions, credit cards are treated strictly as non-cash instruments.