Accounting for Sole Proprietors: Tax & Bookkeeping Tips

Peter Young5 said:So, I'm looking at a 25% rate, but am I supposed to be inputting the base amount along with the 22% sales tax?

Yeah, exactly—the base amount plus the 22% sales tax.

Has anyone here ever dealt with transferring business turnover from a father to a son specifically because the old man is heading into retirement?

If we pull this off within the same fiscal year, do we actually get to continue the existing sequence of invoice numbers, or am I going to have to start all over again at number 1?

I’m looking for some guidance from those of you who have been around the block a bit longer... I’ve noticed a small amount of passive interest hitting my checking account every three months (basically just revenue appearing on the account since the balance is in the black)
How exactly should this be recorded in the KPI, and does it need to show up on the sales tax return? Thanks!

Tyler Cooper8 said:I’m looking for some guidance from those of you who have been around the block a bit longer... I’ve noticed a small amount of passive interest hitting my checking account every three months (basically just revenue appearing on the account since the balance is in the black)
How exactly should this be recorded in the KPI, and does it need to show up on the sales tax return? Thanks!

We had some pretty intense debates about this before submitting the CDC reports.
The laws are vague, leaving too much room for interpretation.👎
It made us quite irritable, so I eventually just decided to list it under miscellaneous receipts.😁
It’s hardly worth a deep dive.😵

Yeah, that whole interest thing with income earners😁
I kept it out of the KPI, but I tucked it into the PPP with an extra note under V. one.
One of my clients actually got grilled by the IRS after filing because they dropped below the VAT threshold, but they were totally fine with how I handled this part.

It doesn't go on the sales tax form since it isn't subject to it!

Huge thanks to S&P 500 and Lily for the breakdown 😉
Everything makes perfect sense now...

Can someone give me a hand here? I run my own small business and just sent out an invoice $467. The client paid via credit card, but after my bank took their cut of the transaction fee, the actual amount that hit my account was only $443. Now I'm stuck wondering how the hell I'm supposed to mark this invoice as fully paid in my books. I'm working over at Silicon Valley.
Thanks.

Nicole Lee6 said:Has anyone here ever dealt with transferring business turnover from a father to a son specifically because the old man is heading into retirement?

If we pull this off within the same fiscal year, do we actually get to continue the existing sequence of invoice numbers, or am I going to have to start all over again at number 1?

You basically start a brand new entity with its own unique ID and a fresh sequence starting at 😉
.

urbanbadger33 said:Can someone give me a hand here? I run my own small business and just sent out an invoice $467. The client paid via credit card, but after my bank took their cut of the transaction fee, the actual amount that hit my account was only $443. Now I'm stuck wondering how the hell I'm supposed to mark this invoice as fully paid in my books. I'm working over at Silicon Valley.
Thanks.

$23 In plain English, you just write off the difference. Once you get the statement from the processor, you record the $23 as a merchant processing fee under your expenses.

Henry Edwards33 said:You basically start a brand new entity with its own unique ID and a fresh sequence starting at 😉
.

$23 In plain English, you just write off the difference. Once you get the statement from the processor, you record the $23 as a merchant processing fee under your expenses.

Since I work over at Silicon Valley, my setup involves several different modules—turnover, sales, auto repair, and a few other things. What I'm looking at isn't just continuing to operate within the same general ledger I'm using right now. No, what I actually need to do is close out the current books entirely, then migrate all the closing balances for inventory, accounts receivable, and accounts payable into a brand-new set of books. This new entity is being opened for the son taking over the father's business. On top of that, I'll have to upload a new tax compliance certificate (which means drafting a new tax authorization act along with about a hundred other tedious administrative headaches...).

Would it be more efficient to handle this transition during the off-season rather than mid-year? Specifically, wait until the father officially retires on December 31st, so everything can transition seamlessly to the son on January 1st?

So, I’ve got a bit of a head-scratcher here—quick question for the pros... I run a seasonal business, and now that I'm in my retirement years, I'm doing some renovations on my commercial space. Specifically, we're laying down brand new tile. I've got one invoice for the tiles going to $833 and another one hitting $400. The big question is: how should I be booking this in the books? Should I be capitalizing this as a long-term asset, or can I just write the whole thing off as an immediate expense right now?

Tyler Jackson8 said:So, I’ve got a bit of a head-scratcher here—quick question for the pros... I run a seasonal business, and now that I'm in my retirement years, I'm doing some renovations on my commercial space. Specifically, we're laying down brand new tile. I've got one invoice for the tiles going to $833 and another one hitting $400. The big question is: how should I be booking this in the books? Should I be capitalizing this as a long-term asset, or can I just write the whole thing off as an immediate expense right now?

I guess I would just write it off immediately.🙄

Henry Edwards33 said:You basically start a brand new entity with its own unique ID and a fresh sequence starting at 😉
.

$23 In plain English, you just write off the difference. Once you get the statement from the processor, you record the $23 as a merchant processing fee under your expenses.

Thanks a ton

http://www.irs.gov/statistics/consumption-data

Good grief, Astrid. 😁

I really need some help here!
I’m running my own solo practice as an attorney, and I’ve officially listed my personal car as a business asset. Since I'm the only employee, do I still need to keep a detailed mileage log for everything?
Thanks so much in advance!

Nancy Mitchell91 said:I really need some help here!
I’m running my own solo practice as an attorney, and I’ve officially listed my personal car as a business asset. Since I'm the only employee, do I still need to keep a detailed mileage log for everything?
Thanks so much in advance!

Yes, every single mile driven for business purposes ☕
Unless there is some kind of fringe benefit salary involved.

Hey there. My wife sent off her tax return without any certified mail or tracking, so now I’m wondering—can I just call my agent at the IRS and demand a receipt? Has anyone here actually dealt with this before?

Is it actually permissible to apply the 70/30 rule to the registration costs of a personal vehicle when filing business expenses? This specific car is listed on my asset register, yet it isn't used for my primary registered activities. Furthermore, I don't maintain a mileage log that would indisputably prove the entire mileage of the vehicle is strictly for business purposes. Or should I just leave it out of my KPI entirely?

Nicole Lee6 said:Is it actually permissible to apply the 70/30 rule to the registration costs of a personal vehicle when filing business expenses? This specific car is listed on my asset register, yet it isn't used for my primary registered activities. Furthermore, I don't maintain a mileage log that would indisputably prove the entire mileage of the vehicle is strictly for business purposes. Or should I just leave it out of my KPI entirely?

And what happens to the owner's draw if it isn't being used for business?
So it's being used personally?
That implies it's effectively a fringe benefit...
It's hard to give a straight answer here.☕

anyone know if a small fast food joint needs OSHA compliance and what kind of paperwork I actually need to deal with?

Nicole Lee6 said:Since I work over at Silicon Valley, my setup involves several different modules—turnover, sales, auto repair, and a few other things. What I'm looking at isn't just continuing to operate within the same general ledger I'm using right now. No, what I actually need to do is close out the current books entirely, then migrate all the closing balances for inventory, accounts receivable, and accounts payable into a brand-new set of books. This new entity is being opened for the son taking over the father's business. On top of that, I'll have to upload a new tax compliance certificate (which means drafting a new tax authorization act along with about a hundred other tedious administrative headaches...).

Would it be more efficient to handle this transition during the off-season rather than mid-year? Specifically, wait until the father officially retires on December 31st, so everything can transition seamlessly to the son on January 1st?

Yeah, honestly, doing it on January 1st is probably the best way to go. That's exactly how I handled transitioning my mom's business over to my name. The whole process is a massive headache. You have to execute a full transfer of the business entity and get everything notarized. If you want the nitty-gritty details, I can walk you through it. Even if the employer identification number stays the same, since the business is tied to a specific individual, a new owner means a brand-new EIN... so basically, everything is new. New certificates, everything. Even though the bank account might stay the same, you still have to update all the registration data. It's a total reset because, at the end of the day, it really is a brand-new business.