Accounting for Sole Proprietors: Tax & Bookkeeping Tips

amberbadger17 said:Does anyone actually know this? Help me out here, please...🙂

It's about installments! I need to know how you actually pay an installment, how you record it in the books, and then how you go about deducting the withholding tax from the total installment amount...

I sent my latest sales tax filing to the IRS, but it hasn't been processed yet. They reached out to let me know there was an error... apparently, I missed marking an "X" somewhere on the form.

I've gone back through everything, but I honestly can't see where that "X" is supposed to go.

If anyone here handles these filings more often than I do, I could really use some help.

There wasn't a refund, a credit, or any carryover from the last period involved. It was just a straightforward payment. Nothing carried over from before.

Thanks,

Maybe you just missed checking the box on the other side? Check under "None," row number 7—it's the part about tax procedures for collected fees.

Alexander Palmer31, thanks for the quick reply.

I didn't mark anything under Section VIII, line 7 before, and now that I've logged into the IRS portal to file, it’s showing a checkmark instead of an X for that spot. Hopefully, it goes through just fine now...

Also, I was wondering—what exactly does "taxation based on cash receipts" mean?

Is that something only businesses that pay sales tax upon receiving payment should mark, or is it a requirement for everyone?

One more thing; which address should I use when filing my sales tax forms?
Basically, I have my home address and then there's the business address where my Small Business is located.
Some people tell me that since I'm technically an individual running a Small Business, I should use my residential address... while others say the business address is the way to go.
I'm stuck, honestly. Both ways seem to make sense...
Thanks,

http://www.irs.gov/tax-info/example-link

Morning!

So, basically, people making income are going to be coughing up a little more than they did back in 2015. ($7.50).

Based on what the text says, the calculation base would look like $1741, which means:

Social Security I: 783.61
Social Security II: 261.20
Medicare: 783.61
Other: 26.12
Employment Tax: 88.81

I might have botched a number somewhere, so my bad on that. What I’m actually sweating over is that IRS filing for income earners. When does it happen? How does it work? And what if we're late on the payment? Are we going to be buried under a mountain of paperwork, or what the hell?

When I'm broke, I pay in tiny increments. Am I going to have to send my IRS filings in tiny little pieces too?

Is there anywhere I can read up on this to get the full story?

Thanks a bunch!

Hey guys, I could really use some help here,

So, I’ve already gone ahead and paid the payroll taxes based on an IRS ruling regarding a Small Business owner who isn't actually an employee of the company.
I was just wondering, would these tax payments count as standard business expenses, similar to how we handle regular employee payroll taxes, or am I looking at something else entirely?

Thanks for any insight you can give me..

amberbadger17 said:http://www.irs.gov/tax-info/example-link

Morning!

So, basically, people making income are going to be coughing up a little more than they did back in 2015. ($7.50).

Based on what the text says, the calculation base would look like $1741, which means:

Social Security I: 783.61
Social Security II: 261.20
Medicare: 783.61
Other: 26.12
Employment Tax: 88.81

I might have botched a number somewhere, so my bad on that. What I’m actually sweating over is that IRS filing for income earners. When does it happen? How does it work? And what if we're late on the payment? Are we going to be buried under a mountain of paperwork, or what the hell?

When I'm broke, I pay in tiny increments. Am I going to have to send my IRS filings in tiny little pieces too?

Is there anywhere I can read up on this to get the full story?

Thanks a bunch!

I managed to dig up a few things online:
1. JOPPAC - obligations for January 2016 due by February 15, 2016.
2. It’s super important to make sure the contribution payment hits on the exact same day the IRS filing is submitted.
3. If you miss the Feb 15 deadline (say, you file on Feb 21), the date on the form still has to say Feb 15.

But as for what happens if someone isn't paying their dues properly... honestly, I haven't got a clue...
There just isn't much info out there yet...

So, I’ve got a bit of a situation here. My boss and his common-law partner both run their own Small Businesses. 👍
Lately, they’ve been shuffling funds back and forth to help each other out, and honestly, I’m totally lost on how to record all this. I need some real answers to a few things:
I’m looking at two types of loans: the boss lending to his own Small Business, and one Small Business lending to the other.😵
Do I actually have to book these loans, and if so, how? 🙂Should we be drawing up formal contracts and calculating interest for these? 🙂And does sales tax even play a role in any of this? 🙂
Thanks so much! Cheers!

casualorca5 said:Oops👎
The 70:30 split usually applies when the vehicle is strictly for business and stays at the office overnight. Commuting from home to work isn't business travel. That would just be considered taxable fringe benefits. As for the question: no, that wouldn't be correct.

????

cosmictinker24 said:Aha! Okay, I have a few entries from defunct businesses and some old stuff that's past the statute of limitations..
1. If I have an invoice from 2011, but part of it wasn't settled until 2014, do I show the remaining unpaid balance and the sales tax on that portion?
2. So, basically, I just dump every invoice into Receipts, set the payment type to In-Kind, and add a note that the entity is dissolved or it's expired?
3. Would I be putting all these invoices into Receipts before the end of the year?
4. Is there anything else needed for the final accounting? Do I need to draft a formal resolution or something?

Thanks a ton!

????

cosmictinker24 said:????

Thanks!
I was under the impression that the 30% they don't allow as a deduction was specifically for the portion used for personal trips.
If that's the case, since my vehicle is already fully depreciated, could I just file a formal waiver to exempt the car from my Small Business expenses entirely? And if so, what would be the best way to actually handle that within my business accounting?

I think I misquoted things earlier; I was actually thinking about this response from casualorca5
Oops
The 70:30 split rule applies when the vehicle is used strictly for business and stays with the company after hours, right? Commuting to and from work doesn't count toward that at all—that would just be considered taxable fringe benefits. So, to answer the question: no, that's not quite right.

Thanks!
I had assumed those non-deductible 30% were meant to cover the private commuting portion.
If that's the case, since my car is already fully depreciated, could I as a Small Business owner just file a formal waiver to exclude the vehicle from my business expenses entirely? And if so, what's the best way to handle that through my Small Business?

Nancy Jones said:I think I misquoted things earlier; I was actually thinking about this response from casualorca5
Oops
The 70:30 split rule applies when the vehicle is used strictly for business and stays with the company after hours, right? Commuting to and from work doesn't count toward that at all—that would just be considered taxable fringe benefits. So, to answer the question: no, that's not quite right.

Thanks!
I had assumed those non-deductible 30% were meant to cover the private commuting portion.
If that's the case, since my car is already fully depreciated, could I as a Small Business owner just file a formal waiver to exclude the vehicle from my business expenses entirely? And if so, what's the best way to handle that through my Small Business?

I'm not sure what you mean by an exemption. A company car can be used for personal trips, but then it's treated as taxable fringe benefits. Or, you could just sell it, which removes it from the asset list...

If you're counting the car as a business asset, you can just file a decision to pull it out of the company holdings—then it just shows up under receipts...

Carol Price4 said:If you're counting the car as a business asset, you can just file a decision to pull it out of the company holdings—then it just shows up under receipts...

Thanks so much!
Since I originally brought the car into the business personally and it's already been fully depreciated, would it work if I just drafted a formal decision and issued an invoice directly to myself as the owner?

Nancy Jones said:Thanks so much!
Since I originally brought the car into the business personally and it's already been fully depreciated, would it work if I just drafted a formal decision and issued an invoice directly to myself as the owner?

Exactly, 🙂

Receiving it as a benefit in kind...

Carol Price4 said:Exactly, 🙂

Receiving it as a benefit in kind...

Thanks so much!

So, if I’ve got my own car registered under my sole proprietorship, I’m assuming I don't have to deal with that whole "payment in kind" salary headache, right? But then I guess I'm wondering how I should actually handle the registration fees... do I just write off the whole thing, or am I stuck with that weird 70:30 split rule?
I was also thinking about fuel costs for the same vehicle—does that follow the same 70:30 logic where I can't claim the full input tax?

Thanks a bunch 🙂

Aaron Young85 said:So, if I’ve got my own car registered under my sole proprietorship, I’m assuming I don't have to deal with that whole "payment in kind" salary headache, right? But then I guess I'm wondering how I should actually handle the registration fees... do I just write off the whole thing, or am I stuck with that weird 70:30 split rule?
I was also thinking about fuel costs for the same vehicle—does that follow the same 70:30 logic where I can't claim the full input tax?

Thanks a bunch 🙂

Take a look at this article; it breaks down which vehicle-related expenses are 100% deductible and which ones fall under that 70/30 split.

Brenda Chase3 said:Take a look at this article; it breaks down which vehicle-related expenses are 100% deductible and which ones fall under that 70/30 split.

Thanks, Brenda 🙂👍