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Tom,
<p>The problem with discussing this sort of thing is that I don't know
what is required by the federal government and what is required by the
state or local governments. So what applies to me may not apply to
you and vice versa.
<p>My business name is Hollinger Piano Service. I understood that
I would have to register some "fictitious name" paperwork, so I called
my attorney. His response? "There's nothing fictitious about
that. You don't have to do anything." People often put my name
on the check when paying for piano tuning. I've had no problem depositing
those checks in the business account with all the rest.
<p>I think you can probably get away with having only one checking account,
assuming no legality problems. I did that when I was part-time.
I just like the idea of keeping my business records separate from personal.
It seems "cleaner."
<p>My tax bill is the same as it would be if I had all funds together in
one account.
<p>To answer your questions below, no, I do not do things that way for
any tax reasons. It seems complicated for me to deposit cash receipts,
since that would involve even nickels, dimes and pennies. I'm not
into that. It's because I want my salary to be consistent each week, so
if someone pays me $75.26 in cash, I deduct 75 bucks from my salary check.
It's a budgeting/money management thing more than anything else, I suppose.
<p>What works for me may seem complicated to someone else. I am not
a pro here. I'm not really giving advice, just letting you know how
I do things, and probably it's not the best. Getting advice from
a good accountant seems smart to me. My CPA is happy with how I do
things, so I am, too.
<p>Yeah, maybe my system <i>is</i> robbing myself to pay myself, but I'm
not going to sue! :-)
<p>Someone mentioned having a third account to put tax money into.
I am very good at budgeting, so I don't find that necessary. My accountant
tells me what my estimated income tax payments have to be, and I transfer
the required portion out of checking into savings, every two weeks just
like clockwork.
<p>Now I'm changing the subject. I get weary of hearing about people
who earn well into six figures and yet have credit cards maxed out, worry
about paying the bills, taxes, etc. My wife and I have determined
to live well within our means, which means we can keep some cash reserves
on hand, all the time. (Of course a major setback could change that
in a hurry.) Many people could make life so much easier for themselves
with financial self-discipline (but the credit card companies would probably
find it difficult to survive).
<p>Forgive me for sounding like a know-it-all (I don't, for sure!), but
when you find something that works for you, it's hard to shut up.
I do recognize that some people just don't have enough income, and that
makes things a lot tougher. Been there, done that.
<p>Regards,
<br>Clyde
<p>Tvak@AOL.COM wrote:
<blockquote TYPE=CITE>If I want to do business under my own name, do I
have to
<br>register my name as a business? I don't want to do anything
illegal, but it
<br>seems redundant.</blockquote>
<blockquote TYPE=CITE>I guess my question was whether there was some tax
advantage to doing it that
<br>way.</blockquote>
<blockquote TYPE=CITE>Clyde, you said you deposit your checks in the business
account and then pay
<br>yourself a salary. Cash goes in your pocket and you deduct that
amount from
<br>your weekly salary check? Is it because of the sales tax issue?
It seems so
<br>overly complicated. I certainly want to do things the legally
correct way, but Clyde's
<br>system seems like robbing Peter to pay Peter!</blockquote>
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