A Business Question

[Clyde Hollinger]

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Tom,

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.

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.

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."

My tax bill is the same as it would be if I had all funds together in one
account.

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.

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.

Yeah, maybe my system is robbing myself to pay myself, but I'm not going to sue!
:-)

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.

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).

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.

Regards,
Clyde

Tvak@AOL.COM wrote:

> If I want to do business under my own name, do I have to
> register my name as a business?   I don't want to do anything illegal, but it
> seems redundant.

> I guess my question was whether there was some tax advantage to doing it that
> way.

> Clyde, you said you deposit your checks in the business account and then pay
> yourself a salary.  Cash goes in your pocket and you deduct that amount from
> your weekly salary check?  Is it because of the sales tax issue?  It seems so
> overly complicated.  I certainly want to do things the legally correct way, but
> Clyde's
> system seems like robbing Peter to pay Peter!

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