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Accounting for business?
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Accounting for business? - June 21, 2006 6:38:00 AM
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cowboybuboy
Posts: 51
Joined: June 15, 2005
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I just started being an independent contractor for home health agencies. I also registered my company name. I guess my question is, "Should I make checks payable to me? Or to my company?"
I'd appreciate any help.
Thanks!
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Re: Accounting for business? - June 23, 2006 3:27:00 AM
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ehanso
Posts: 353
Joined: September 14, 2004
From: Minnesota
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I would suggest contacting your accountant or attorney as each state's reg are different regarding the tax and legal ramifications of how the cash flows through a business.
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Re: Accounting for business? - June 23, 2006 1:55:00 PM
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bhenchodh
Posts: 39
Joined: April 4, 2006
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FallsPT is right. You can contact your lawyer/ accountant or you can go to [URL=http://www.illinois.gov]www.illinois.gov[/URL] click on business and research it yourself. If you registered a company name what kind of tax structure did you pick. Are you sole member proprietorship, sole member LLC, or corp/ s-corp? Taht will determine who you should make ccecks payable to. Because in NJ ind. contractor PTs are bonded by HHA I have my earnings from HHA contracts recorded through under my social security number , but all of my earnings from my clinic and from at home therapy are recorded through my business tax id. Because one has nothing to do with the other. Yes my bookkeeping is extensive... Of course you can combine them if you want but that all depends on your future plans,and what your lawyer/ accountant recommends to you.
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Re: Accounting for business? - June 23, 2006 1:56:00 PM
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bhenchodh
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Sorry for the spelling mistakes. I am in rush as always...
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Re: Accounting for business? - June 23, 2006 6:38:00 PM
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cowboybuboy
Posts: 51
Joined: June 15, 2005
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I formed an LLC. And at the end of the year, I think I have to submit a 1065 form. Wonder if I could just use my SS# so I don't pay taxes twice?
I currently use quickbooks online. AHAwakins, how do you do at home therapy? Is that outpatient at home?
Do you pay taxes twice when you get paid thru your company?
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Re: Accounting for business? - June 24, 2006 2:35:00 AM
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SJBird55
Posts: 2292
Joined: May 10, 2004
From: Michigan
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If I understand LLC correctly, here in MI, you are it and it is you. If a home health agency pays you directly or pays you through your company, I'm not sure if it matters because if you end up being paid more than say $600 (I believe it's that amount here in MI), you'll get some tax statement form from them at the end of the tax year indicating what they paid you that year.
I honestly don't understand the tax crap or the exact legal crap. My brother in-law is an attorney and I chose the LLC for the legal ease of it and the legal protection that kind of set up allowed compared to other options. I think the downside of an LLC had to do with taxes?
You ought to talk to your accountant though - I would personally think it would be a whole lot easier to consistently receive payment one way or the other? I think I'd be way too confused doing what AHA does... but then again, I'm easily confused. LOL
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Re: Accounting for business? - June 25, 2006 3:10:00 PM
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bhenchodh
Posts: 39
Joined: April 4, 2006
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My 2 cents about taxes: When you were employed your employer was paying it for you AND you were paying it yourself. When you are self employed guess who pays both parts...you. The only way out is to investigate which corporation style is good for you. Corps. are more headache but more money saved. Still you pay the govt if you are honest. I maybe wrong, so If I am please educate me.
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Re: Accounting for business? - June 25, 2006 3:16:00 PM
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bhenchodh
Posts: 39
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SJ is right LLC has legal advantages, but tax wise it is pass through taxation. I keep my HHA income different from my company because I want to show my companies earnings as an ASSET/ INCOME under accounting. My HHA income has nothing to do income from my company but still tax wise I pay taxes on all of my income, wherever it come from.
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Re: Accounting for business? - June 26, 2006 3:33:00 AM
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cowboybuboy
Posts: 51
Joined: June 15, 2005
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The way I understand it now after reading books about LLC and independent contractors, LLC is a pass through entity in terms of taxation. You can opt to become S corp or C corp. Since LLC is not required to pay taxes on it's own, members of the LLC are required to pay their own taxes based on the % of their share in the company. But since I'm an independent contractor, the IRS might classify me as a personal service professional (Doctors, nurses, attorney, allied medical professional) which has a flat fee of 35%. I guess I'll just make the checks payable to LLC so that I'll just have to tax myself instead of the company at the end of the year.
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