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Home › Society › Economy › Business, Accounting & Taxes › Accounting for Sole Proprietors: Tax & Bookkeeping Tips

Accounting for Sole Proprietors: Tax & Bookkeeping Tips

Started by ruggedheron13 · · 👁 9 views · 2.2K replies

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Participants ruggedheron13rowdyhawk25shadowwalker79Robin Cook4Brenda Chase3stormybadger8placidlynx92Taylor Rogers2Henry Edwards33Lisa Hernandez5driftingfox24Robert Young4cosmictinker24Joshua Barrett31James Morgan21David Green642Kyle Rogers8Chris Murphy8Nicole Lee6fadedcrane92Thomas Brown50Keith Martinez5Nancy JonesCharles Stewart69 …
Lisa Hernandez5 Lisa Hernandez5 Newcomer
2 messages
joined Feb 2014
#21 ·
Lisa Hernandez5;48932182 said:hey, if anyone happens to know...

Does the sales tax from a piece of equipment you bought—you know, something that goes on the balance sheet as a fixed asset—need to be included in the VAT section under expenses when looking at your income and outflows? Basically, should the tax in the expense report match what's in the actual tax filing?

Anyway, just wanted to drop the answer here in case someone else is stuck on this too. I gave the IRS a quick ring, and they confirmed that yeah, you definitely need to include the input tax you claimed on that equipment purchase within your expense reporting.
driftingfox24 driftingfox24 Newcomer
7 messages
joined Aug 2013
#22 ·
Formula 1 said:And honestly, I’m skeptical about all of that, if you know what I mean...
I just got off the phone with the IRS, and apparently, they still don't have a clue when it comes to self-employed income tax filers.
Plus, nobody can even tell me which specific code to use for that infamous employment tax contribution...

All they told me was to sit tight, wait for a notice from Penn State, and just hold off on paying anything for now 😵

Anyway, here's the answer at this link:
http://www.accounting-taxes.com/
driftingfox24 driftingfox24 Newcomer
7 messages
joined Aug 2013
#23 ·
Lisa Hernandez5 said:driftingfox24, you’re spot on. But honestly, they’ve made it so easy for small businesses where they just shove everything straight into the system to register. Meanwhile, us regular folks—actual individual taxpayers—we still have to resubmit everything manually...

In the meantime, I’m not even buying cigarettes because God forbid there’s a price hike and I don't have a way to send over the payment...

This whole useless, pointless bureaucracy drives me absolutely insane. Broken phone lines, nothing works. If the goal is for me to pay everything I owe, and to do it on time, I don't get why they're breathing down my neck to take a whole day off just to deal with a hundred million pieces of paperwork. And the Secretary of State's registry is actually totally legit and up to date; you can check everything with a single click. Registered activities, tax IDs, whether they're operational... it's all right there...

Yeah, Lisa Hernandez5, you aren't wrong. We really went through the wringer, we even had to go get certain copies notarized by a public notary—$28 which is such a hassle—but I will say the IRS was actually pretty helpful, their helpdesk worked with us to make the digital registration smoother, and now I see they finally updated the website with some new info for small business owners. It would've been a total nightmare to get everything finished properly without that...🙂
driftingfox24 driftingfox24 Newcomer
7 messages
joined Aug 2013
#24 ·
I honestly don't even know where to start with this one, because looking at the sheer mess we're dealing with right now... it’s just exhausting, really. You see people out there acting like everything is perfectly fine, like the system isn't basically held together by duct tape and prayers, but if you actually take a second to look at the data—not the sanitized version they feed you on the evening news, but the actual numbers—it’s pretty clear we're heading toward a massive headache... It feels like we're constantly circling the drain while everyone debates whether or not we should even bother grabbing a life jacket. And don't get me started on what some of these "experts" are saying on NPR lately, because it’s almost insulting how much they ignore the reality on the ground here in the States... It’s just one thing after another, isn't it? Just a endless loop of predictable chaos that nobody seems willing to call out for what it actually is... driftingfox24 says:
Hey, quick question... did this contribution actually drop off since... $80 So, I’m sitting here looking at this 132k bill that’s been hanging over my head for three months now... does anyone actually have any idea if anyone has received their official paperwork yet? I'm trying to figure out if I need to cough up this extra payment before the end of February or if I can just sit on my hands for a little longer...

So, I’m looking at the Chamber of Commerce flat-fee contribution for the first quarter of 2014... the deadline to get that payment in is February 28th, 2014, and I'm just trying to track down the exact amount... $44Sent from the IRS...
driftingfox24 driftingfox24 Newcomer
7 messages
joined Aug 2013
#25 ·
Knez1974 said:Please, someone out there definitely knows how to handle inventory surpluses and shortages in the books? If we pay sales tax on a shortage, but end up with an actual surplus, can we somehow "offset" that... maybe just balance it out?

I’ve dropped a couple of links here, hopefully they give you at least a little bit of direction...
driftingfox24 driftingfox24 Newcomer
7 messages
joined Aug 2013
#26 ·
Knez1974 said:So, I just did my first inventory count working in retail, and now I’m staring at both surpluses and shortages in my inventory levels. Apparently, if there's a shortage, I have to deal with paying sales tax on it, which sounds like a blast... can anyone walk me through how to actually record an inventory surplus in the books?

You've gotta log those extra goods—according to a recent issue of NPR:

-update your retail inventory cards (or whatever similar tracking system you use in-store) by recording it as a debit;
-log it in the inventory list (use the standard KP form) for the store, again, as a debit based on the inventory receipt;
-for manufacturing or hospitality settings, update the material cards, stock records, or equivalent logs as a debit;
-on the KPI form, it gets treated as an in-kind expense based on the official inventory investment report.
Brenda Chase3 Brenda Chase3 Regular
367 messages
joined Dec 2016
#27 ·
The IRS has officially started assessing employment levies for small business owners and independent contractors. Since the first effective date was March 14, 2014, we won't be hit with a double payment for January and February. Instead, they’ve jumped straight into the February assessment, which is due this March.

The notice number is 8770, and the total amount due is $29.
rowdyhawk25 rowdyhawk25 Member
38 messages
joined May 2014
#28 ·
Brenda Chase3 said:The IRS has officially started assessing employment levies for small business owners and independent contractors. Since the first effective date was March 14, 2014, we won't be hit with a double payment for January and February. Instead, they’ve jumped straight into the February assessment, which is due this March.

The notice number is 8770, and the total amount due is $29.

That's great news! I was actually logging into the IRS portal the other day looking for that 8770 payment, but nothing showed up, so I was genuinely confused about where they had tucked it away. It looks like one less payment to worry about if they didn't require us to catch up on that first month.
Robert Young4 Robert Young4 Newcomer
1 message
joined Feb 2014
#29 ·
rowdyhawk25 said:That's great news! I was actually logging into the IRS portal the other day looking for that 8770 payment, but nothing showed up, so I was genuinely confused about where they had tucked it away. It looks like one less payment to worry about if they didn't require us to catch up on that first month.

I suspect they'll need it for January too—it just seems like they pushed back the deadline since there's such a lag with the official notices coming out.
rowdyhawk25 rowdyhawk25 Member
38 messages
joined May 2014
#30 ·
Robert Young4 said:I suspect they'll need it for January too—it just seems like they pushed back the deadline since there's such a lag with the official notices coming out.

Yeah, that's definitely a possibility,🙂
Brenda Chase3 Brenda Chase3 Regular
367 messages
joined Dec 2016
#31 ·
It’s certainly possible. I was being a bit naive thinking they might just forget about it for a month. But when you look at any other contribution on your bank statement, it clearly specifies which month the charge is for. With this 8770 entry, however, it just says "annual assessment." Because of that, we don't even have a clue which specific month this is supposed to cover.
cosmictinker24 cosmictinker24 Active Member
110 messages
joined Oct 2019
#32 ·
driftingfox24 said:Anyway, here's the answer at this link:
http://www.accounting-taxes.com/

So, I stopped by the IRS office yesterday, and the clerk mentioned they just started mailing out the notices.
As for those payroll taxes... I guess you can pay them upfront if you want to be proactive—both the employment tax and the other stuff—but there's really no rush. You could just wait for the official notice to arrive since the deadline isn't until March 15th. They’ll definitely get to us by then, and we shouldn't have to worry about any late interest kicking in before that date...
Joshua Barrett31 Joshua Barrett31 Newcomer
1 message
joined Feb 2014
#33 ·
Greetings, I have a question for the group; perhaps this has already been addressed in previous discussions, but I haven't been able to locate a definitive answer, so I would be truly grateful if someone could lend me some clarity.

My small business is registered for sales tax, and following the submission of my tax return, I was notified that I need to pay my social security and health insurance contributions. Those payments have already been settled. My question is whether these specific contributions should be recorded in the KPI as an expense, and furthermore, whether one should record the prepayment for these contributions within the KPI ledger.
placidlynx92 placidlynx92 Active Member
92 messages
joined Jan 2013
#34 ·
Joshua Barrett31 said:Greetings, I have a question for the group; perhaps this has already been addressed in previous discussions, but I haven't been able to locate a definitive answer, so I would be truly grateful if someone could lend me some clarity.

My small business is registered for sales tax, and following the submission of my tax return, I was notified that I need to pay my social security and health insurance contributions. Those payments have already been settled. My question is whether these specific contributions should be recorded in the KPI as an expense, and furthermore, whether one should record the prepayment for these contributions within the KPI ledger.

Yes, those contributions are treated as an expense once they've actually been paid.
If you're referring to income tax prepayments, those don't count as an expense.
Robin Cook4 Robin Cook4 Active Member
70 messages
joined May 2012
#35 ·
hey, can someone hit me up with a list of all the books I need to keep on hand for a fast food joint? thanks!
Robin Cook4 Robin Cook4 Active Member
70 messages
joined May 2012
#36 ·
oh, one more thing—what’s the damage for an accountant when you're just running a tiny fast food spot with one employee? thanks in advance!
James Morgan21 James Morgan21 Newcomer
1 message
joined Feb 2014
#37 ·
I'm running my own small business and I'm not registered for sales tax. Since I use a standard point-of-sale system, I was wondering: is just keeping a simple sales log enough, or am I required to pull daily register reports?
David Green642 David Green642 Active Member
91 messages
joined Jul 2015
#38 ·
I’m a bit confused here—please share your experiences if you can 🙂

I have cases where the forest compensation forms were filed perfectly back in 2012. But since then, there’s zero trace of any debits or anything on the payment card records... nothing.

Now we’re submitting for 2013, and they’re asking for debt history—or overpayments from 2012, the usual advance payment stuff. How am I supposed to enter data when none of this was even recorded in the first place?

Honestly, I haven't a clue what anyone is doing here. 🙂
Kyle Rogers8 Kyle Rogers8 Active Member
58 messages
joined Apr 2012
#39 ·
David Green642 said:I’m a bit confused here—please share your experiences if you can 🙂

I have cases where the forest compensation forms were filed perfectly back in 2012. But since then, there’s zero trace of any debits or anything on the payment card records... nothing.

Now we’re submitting for 2013, and they’re asking for debt history—or overpayments from 2012, the usual advance payment stuff. How am I supposed to enter data when none of this was even recorded in the first place?

Honestly, I haven't a clue what anyone is doing here. 🙂

On the IRS portal?
The IRS doesn't track forest compensation.

You need to contact the USDA instead.
David Green642 David Green642 Active Member
91 messages
joined Jul 2015
#40 ·
Kyle Rogers8 said:On the IRS portal?
The IRS doesn't track forest compensation.

You need to contact the USDA instead.

So who actually manages it then?

I’m not planning on calling the Forest Service—seems like a waste of time. If they’re fine with not paying, whatever... there's really no point...

If it's a tax—and let's be real, it is—it should show up on a standard tax card, since the government is the one pocketing it. 🤷

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