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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 · · 👁 90 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 …
amberbadger17 amberbadger17 Active Member
190 messages
joined May 2012
#1341 ·
placidlynx92 said:That link refers to the school's obligation to cover contributions for their student. You are simply paying a stipend or internship fee, and you only file the JPMorgan Chase report for that specific amount. Those employer-side taxes don't apply to you—that's the school's headache to deal with.
This internship compensation—or whatever they want to call it—is considered tax-exempt income up to $533 per month. You just file the JPMorgan Chase paperwork after the payment is made, by the 15th of the following month. I don't recall the exact filing codes off the top of my head. It could have been paid in cash, though I'm not sure if that's still an option. If you're paying via the student's bank account, you'll just need their routing and account numbers.

Hey, placidlynx92, or anyone else who actually knows what they're doing because clearly I don't—here's a totally brilliant question: when I'm filing the JOPPD for that intern's reward, am I supposed to put the student's actual name and Social Security number on there???????
placidlynx92 placidlynx92 Active Member
92 messages
joined Jan 2013
#1342 ·
👍
amberbadger17 said:Hey, placidlynx92, or anyone else who actually knows what they're doing because clearly I don't—here's a totally brilliant question: when I'm filing the JOPPD for that intern's reward, am I supposed to put the student's actual name and Social Security number on there???????
Keith Martinez5 Keith Martinez5 Active Member
167 messages
joined Mar 2014
#1343 ·
Has anyone else still waiting on their tax refund notice from back in 2015? I haven't seen anything hit my mailbox yet—just starting to get a little anxious about it...
stormybadger8 stormybadger8 Veteran
1.8K messages
joined Apr 2013
#1344 ·
Keith Martinez5 said:Has anyone else still waiting on their tax refund notice from back in 2015? I haven't seen anything hit my mailbox yet—just starting to get a little anxious about it...

Wait, do they even mail them out? 🤷
I haven't seen mine either, but my bank statement shows the IRS actually sent the money back... and it's been almost a month. Seems pretty weird for the paperwork to take that long to arrive.
Then again, why would they dump money into your account if they hadn't processed and approved the return in the first place? 🤷
Keith Martinez5 Keith Martinez5 Active Member
167 messages
joined Mar 2014
#1345 ·
stormybadger8 said:Wait, do they even mail them out? 🤷
I haven't seen mine either, but my bank statement shows the IRS actually sent the money back... and it's been almost a month. Seems pretty weird for the paperwork to take that long to arrive.
Then again, why would they dump money into your account if they hadn't processed and approved the return in the first place? 🤷

I actually went to check my account right after reading your post, and as of July 13th, 2016, it looks like the refund went through—but I still haven't seen any paperwork from the Treasury. It's strange... in the past, I always received the official decision first, and then the money followed shortly after. 🤷
Keith Martinez5 Keith Martinez5 Active Member
167 messages
joined Mar 2014
#1346 ·
Keith Martinez5 said:I actually went to check my account right after reading your post, and as of July 13th, 2016, it looks like the refund went through—but I still haven't seen any paperwork from the Treasury. It's strange... in the past, I always received the official decision first, and then the money followed shortly after. 🤷

I gave the IRS a call, and the agent was actually really helpful—he told me that they aren't issuing written tax determinations in hard copy this year. So, whatever we're seeing on the PKK is essentially the final word. I’m just a little stuck on the logistics, though—like, what’s the actual deadline if someone wants to claim their refund? Does the clock start ticking from the moment it shows up on the digital statement, or does it work differently now?
Morgan Sullivan Morgan Sullivan Newcomer
4 messages
joined Jan 2018
#1347 ·
Is it necessary to file a joppd report when paying out an "advance income" to a business partner?

My partner and I run a joint small business, and since she’s retiring on August 1st, we want to pay her a "portion" directly to her account.

From what I can gather—even though our partnership agreement says we split everything 50/50—nobody actually checks that. So, I suppose I could just pay her some arbitrary amount, leave the rest in the business account, and then basically pay myself later while she never sees another dime...?

I'm also dealing with a massive headache regarding "transferring" the business from a joint venture to a sole proprietorship. It's being treated like a brand-new entity, even though the bank account and tax ID stay exactly the same.

At Synesis, I was already forced to open a "separate" set of books for myself because the IRS insisted I file a distinct joppd for every individual. Even though Synesis was perfectly capable of generating one single joppd for both of us, I had to create two separate ones—essentially acting like there are two different businesses.

Now, I assume I have to open a third set of books, where I first have to "merge" the totals from the previous two, then carry over the balance to continue the year under a new tax ID and all that...?

On top of that, the folks at Fiskal1 told me it isn't possible to just de-register a location and re-register it with a new fiscal certificate. Instead, they archive the old one—effectively losing it—and open a completely new one where the numbering starts back at 1. If an inspector ever shows up, pulling up an old receipt would require their specific service and access to that archived data....
It would be nice if you could just pick up where you left off, especially since nothing is actually changing except the owner's tax ID, but well... here we are.

I don't really see the point of partnerships or business transfers if it ends up requiring the same amount of work as starting from scratch. I mean, I know why they do it, but it still feels unnecessarily convoluted.
Nicole Lee6 Nicole Lee6 Regular
252 messages
joined Jun 2007
#1348 ·
The whole fiscalization process is tied directly to the owner's Social Security number, which is why those sequences have to reset back to 1. It also means you’ll be stuck dealing with the IRS to generate a brand-new fiscal certificate, which you'll then have to manually integrate into your software solutions. I’m facing the exact same headache over here, though my situation is a bit more complicated since I'm currently managing a business succession plan ahead of my retirement....
Richard Howard55 Richard Howard55 Regular
251 messages
joined Aug 2015
#1349 ·
Morgan Sullivan;59650831 said:QUOTE]

You don't submit a joppd form for advances on business income.

I guess you just opened a separate ledger specifically for the joppd filing. Since every entrepreneur has to file under their own Tax ID, and all the bookkeeping and adjustments happened in one spot—including the contribution payments for both parties—it makes sense. Per Section 48 of the regulations, joint income is treated as a single unit.
Morgan Sullivan Morgan Sullivan Newcomer
4 messages
joined Jan 2018
#1350 ·
Thanks, Jane Doe & John Smith!

Yeah, I finally managed to "grab" my new tax certification yesterday—honestly, I’d already forgotten how to even download it. I went a bit crazy trying to track down the right instructions... (they don't have file extensions when you download them, so if you don't manually add .pdf because you think it's some kind of error... you just end up spiraling through endless loops of IRS card reader manuals and guides...)

It's nice to have confirmation that the folks at the IRS explained exactly what I need to do regarding resetting the register to zero. Appreciate it!

I also handled everything over at Accenture—or, well, I will handle it, since I'm lagging behind on everything, though I wasn't even entirely sure if I was doing it right myself. So, thanks for the reassurance!

Anyway, I'm still a little confused—I'm opening a new ledger now and transferring everything over as if it were a new year... all because the owner description is changing... just so that by the end of the year, I can pull different versions of the P-PPI and such for "before us" versus "after me"?
Peter Young5 Peter Young5 Member
35 messages
joined Jan 2015
#1351 ·
Hi there,
I’m an independent contractor looking to bump up my contribution base... but I keep hitting an error message in the Joppd system. Is there actually a way to pay contributions based on a higher base than what’s officially prescribed?
Thanks,
Carol Price4 Carol Price4 Regular
380 messages
joined Nov 2019
#1352 ·
Peter Young5 said:Hi there,
I’m an independent contractor looking to bump up my contribution base... but I keep hitting an error message in the Joppd system. Is there actually a way to pay contributions based on a higher base than what’s officially prescribed?
Thanks,

You'll want to look into codes 5802 through 5807 for a higher base—it really just depends on your specific situation...
Peter Young5 Peter Young5 Member
35 messages
joined Jan 2015
#1353 ·
Thanks 🙂
Olivia Cruz86 Olivia Cruz86 Active Member
114 messages
joined Nov 2014
#1354 ·
Hey there,

So, I need to invoice a client for some legal services—he’s technically from the United Arab Emirates, but he’s running his business here in the States. Now, get this: he’s telling me to bill him in USD and says he’ll pay using a US-based account he has set up here. Does anyone actually know how that invoice should be structured or how the bookkeeping works for something like this? Honestly, I rarely deal with international clients, so I haven't really dug into the weeds of the tax side of things...
thanks!
Kate Adams7 Kate Adams7 Member
44 messages
joined Sep 2015
#1355 ·
If you're billing a company registered here in the States, it’s just your standard invoice—base amount plus sales tax, assuming you're set up for it.
If you're invoicing a firm in the United Arab Emirates, I'm honestly not 100% sure since they aren't part of the European Union, so they probably count as a third-country entity. I once handled some legal service billing for a client over in the US, and we applied the reverse charge rule under the local tax code. On the tax forms, it goes right into section I.5., and the IRS cleared it without any issues.👍
Olivia Cruz86 Olivia Cruz86 Active Member
114 messages
joined Nov 2014
#1356 ·
Kate Adams7 said:If you're billing a company registered here in the States, it’s just your standard invoice—base amount plus sales tax, assuming you're set up for it.
If you're invoicing a firm in the United Arab Emirates, I'm honestly not 100% sure since they aren't part of the European Union, so they probably count as a third-country entity. I once handled some legal service billing for a client over in the US, and we applied the reverse charge rule under the local tax code. On the tax forms, it goes right into section I.5., and the IRS cleared it without any issues.👍

No way, the invoice is going to be issued to a private individual from the United Arab Emirates!
I’m pretty sure there’s no tax involved, and you’re supposed to write "Not subject to taxation according to Section 24, Paragraph 1 of the Value Added Tax Act!" on the bill.
In my book, wouldn't that also go under I.5. for services provided outside the European Union?
Kate Adams7 Kate Adams7 Member
44 messages
joined Sep 2015
#1357 ·
Aha, so we're talking about an individual... Okay, I haven't run into that specific scenario myself, but yeah, this article definitely covers it. Honestly, it might be worth double-checking with a local bar association or maybe grabbing some advice from a tax pro just to be safe.
cosmictinker24 cosmictinker24 Active Member
110 messages
joined Oct 2019
#1358 ·
Quick question? I’ve been paying for this fiscal software because we used to have maybe one or two cash transactions a year, but honestly, last year we didn't have a single one—everything went through our business checking account. What do I actually need to do to stop using this fiscal program? It feels like a total waste of money at this point...
Do I just need to officially decide that we won't be taking any cash payments anymore? Or is there something else required by the IRS?
Thanks for the help
Brenda Chase3 Brenda Chase3 Regular
367 messages
joined Dec 2016
#1359 ·
cosmictinker24 said:Quick question? I’ve been paying for this fiscal software because we used to have maybe one or two cash transactions a year, but honestly, last year we didn't have a single one—everything went through our business checking account. What do I actually need to do to stop using this fiscal program? It feels like a total waste of money at this point...
Do I just need to officially decide that we won't be taking any cash payments anymore? Or is there something else required by the IRS?
Thanks for the help

You don't actually need to do anything special. You only need a fiscal register if you are processing cash transactions; if you stop doing that, you simply decommission it, return it, and you're done. If you ever decide to take cash again down the road, you'll just have to acquire a new one—it's really that straightforward. One of my clients handled this about a year ago; they just returned the device and that was the end of it. Even if you aren't using the hardware, you remain a subject of fiscalization requirements, so keep your internal documentation in order, but the physical register is only necessary if you're handling cash.
Carol Price4 Carol Price4 Regular
380 messages
joined Nov 2019
#1360 ·
You’ve gotta notify the IRS if you're moving away from handling cash—just like when you first set everything up, you'll need to update your status to closed and send over that XML file.

That way, they’ll officially know you aren't doing business with cash anymore...😉

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