A Business Question

[Clyde Hollinger]

Tom,

I am self-employed, no employees, and work out of my home.  Here in Lancaster
County, PA, USA, I think it is simply the requirement of the telephone company
that I pay business rates for telephone use.  We have one line for home and
business, and another just for the computers to go on-line.  The telephone
company said if I have any business stationery, invoices or cards, then I have to
pay business rates, so I do.  It's still cheaper than having a third line.  Last
time I checked it cost me an extra $9.35/month.

I do have a separate business bank account, but I don't think I would be required
to.  Accountants would recommend it, though, I think.  All my checks from piano
service go into the business account, and from there I write my weekly salary
check.  Both my personal and business accounts are with a credit union (and both
are free), although I make my deposits through the closest ATM.  If there's any
grumbling it hasn't reached me.

It's tough to keep a strict separation between personal and business funds, and I
don't worry about it very much.  What if someone pays me cash?  That amount gets
recorded in my business ledger as income but then goes into my pocket, and I
reduce my weekly check by approximately the same amount.  The main thing is to
accurately record all my income and expenses and keep things well documented.  I
can't imagine how I can run into a problem with how I'm doing things.  As my CPA
says, in my case my business and I are essentially the same entity.

I also needed to register with the state to collect state sales tax.  Yes, it's
one more thing to deal with, but it really only takes several minutes per month
to fill out the tax form and send it in with the money.

I agree with Wim that if there is something you really should be doing to be
legal, then do it.  It's not worth it to get embroiled in a big mess.

Regards,
Clyde

Tvak@AOL.COM wrote:

> My bank has been grumbling about the number of checks I deposit, suggesting I
> might need to open a business checking account.  Since personal accounts are
> free, and since I do business under my own name, I'm not eager to do this.  I
> would have to register as a business with the county first.  (I did actually
> a register as a small business with the county when I started out, but I no
> longer use that company name.)  For years, as a pianist I collected checks
> from various parties and it never occurred to me to register as a business.
> I play the piano, they pay me.  Now I tuned the piano, they pay me.  Why
> bother registering as a small business?  They write a check to me, and I
> deposit it in my checking account.
>
> Where I live you must register a business with the county to get a listing in
> the Yellow Pages.  My registration under the previous company name qualifies
> me even though I am now listed just by my name.  I'm not really interested in
> going through the expense and hassle of registering as a business again.
>
> If I may ask, how many of you have registered as a small business?  Is there
> any advantage or disadvantage to being a small business versus an individual?
>  Are taxes handled the same way?
>
> BTW, with tax season coming up, can any of you in the Chicago area recommend
> a good tax guy who is familiar with tuner's deductions, expenses, etc.?
>
> Thanks for any advice,
> Tom Sivak