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109

You can't prove a negative. Therefore, you cannot prove that an invoice is unpaid; it is assumed to be unpaid on claiming so, and the payer has to prove that he paid. That should be easy for him, if they did pay.


107

EDITED after OP added more details. no taxes have been taken out yet. 24% will probably be withheld, taking you down to 38K. The organization that ran the sweepstakes must withhold 24%. It's the law, and of course you have to claim it on your tax return, whether or not they withhold anything. Because they'll withhold, they'll send you a W-2G saying ...


78

We can't know. The question you need to ask yourself is: "Is this app going to make me more than $40,000?". This is unfortunately a question which is impossible for us to answer. You say the app makes you $650 a month. If it would keep doing that, it would have reached that goal in 5 years. But will it? You said it's growing, but will it keep growing? We ...


77

Simple: Do a stock split. Each 1 Ordinary share now = 100 Ordinary shares (or 100,000 or whatever you choose). Then sell 20 (or 20,000) of them to your third party. (Stock splits are fairly routine occurrence. Apple for example has done several, most recently in 2014 when 1 share = 7 shares). Alternatively you could go the route of creating a new share ...


56

Forget the Roth for one moment. Having a $5500 deduction for your LLC would be great. Parents hire their kids all the time. To do real work at a reasonable wage. Do you have work that's appropriate for the child and would it pass the duck test*? If not, don't do it. (per a request via comment - A duck test - "Is the work real and substantial enough that the ...


48

There are 2 basic ways to have someone buy partial ownership of your company: They can buy shares that you already own. This means they will give cash to you personally, and that if you sold the shares for more than you bought them for, you will likely pay tax on that gain. [Splitting your stock, as referenced above, and then selling some of that stock will ...


47

You make $50/hr and are in debt? This is a serious problem! The $50K is a distraction. This is what I'd do: Pay off any high-interest debts (say 7% and above) up to ~$40k (saving some for taxes, ignore if they're already withheld). Stick remainder in a High Yield savings account (e.g. Ally) and forget about it. Discontinue use of credit cards, if you're ...


37

It is a decent offer. When one evaluates a business proposal the typical discount rate is 20%. That is a business is only worth investing in if it returns 20% on the initial investment. So the math is this, 650*12=7800 yearly income. Divide that by .2, comes to 39K, basically spot on with the offer. So you are left with the age old decision of which ...


34

You're getting confused between several different things. 10K - cash transactions over $10,000 are reported to FinCEN under BSA. This is to prevent money laundering. IRS - IRS wants to see your tax return with all your income reported there. They don't see your bank deposits unless they audit you. 1 and 2 are not related at all.


34

It depends on the finances involved, but particularly if you're not billing anything right now and may have no revenue this year, it's probably a good idea to bill his company. This is in part because some deductions or other tax treatments are only allowed if you have revenue and/or income. The biggest example I can think of is the Solo 401k - you can ...


31

Joel Spolsky's Take On Equity Allocation In A New Software Startup: This is such a common question here and elsewhere that I will attempt to write the world's most canonical answer to this question. Hopefully in the future when someone on answers.onstartups asks how to split up the ownership of their new company, you can simply point to this ...


25

How do I achieve my savings goals? This question is the essence of personal finance. Whether the goal is to save for a down-payment on a house, retirement, or just an expensive toy (like a sports or luxury car) the first step is to define what you are trying to achieve and work backward from the big goal to see how much you have to set aside periodically to ...


24

The bank won't let you because: Differences in required account features — Business accounts have different features (many of them legal features) that are required by businesses. For instances: Do you want to be able to deposit cheques that are written out to your business name? You need a business account for that. Your business could be sold. ...


24

In the US tax system, you cannot "write-off" capital assets. You have to depreciate them, with very specific exceptions. So while you may be purchasing $4500 of equipment, your deduction may be significantly less. For example, computers are depreciated over the period of 5 years, so if you bought a $1000 computer - you write off $200/year until it is ...


22

Contractors regularly deposit checks like this; if the income is legitimate don't worry. Report it to the IRS as income whether or not the customer issues you a 1099. With deposits like this you should be making quarterly payments to the IRS for your projected income.


21

There are legitimate reasons: She is a sole proprietor, and doesn't want to give out her last name. She doesn't participate in the banking system for various reasons, and hands the check to a third party. She may have had an unpleasant audit experience with the tax authorities and wants to maintain a smaller record footprint. She may have an abusive spouse ...


18

Is it worth it for me to "charge" him? I can think of two reasons why you might want to charge your husband: Building up your portfolio. Regardless of whether or not you charge him, you can include the website you build in your portfolio, of course. But if you can add a dollar amount to the work you performed, it may give your work some credibility (if it ...


18

Not sure if I've read properly, but 50k is not all that much, even moreso as existing debt is involved (was it maybe 500k, and I misread?). Insofar, the mere idea "Should I buy property or start a business or something" makes me go "WTF?!", sorry. Debt, especially debt with high interest rates (credit cards?) eats away your assets, and it does that ...


17

What did you sign when the account was opened? What did you sign when you left the company, to transfer those responsibilities? Unless the bank has a record of someone else being responsible, they are correct in billing the one who signed their paperwork. Of course this also probably means you still have access to the account, so your ex-partners should be ...


16

To qualify as a woman owned business, a woman or group of women must own shares worth 51% of the business. If your investor was a woman, the entire 5% could come from her share of the company without affecting the 51% ownership requirement. Could you find a woman to add as an investor? If you each had your shares diluted 5%, She would be down to 48.45% ...


15

I would say that all of the reasons you list in your question are valid, and I would add the following... You are in the landscaping business, not the accounting business. If you manage everything in spreadsheets, at least one of you has to become the bookkeeper and leave the landscaping to the others. Spreadsheets are "agnostic" in how you use them, so you ...


15

I am going to keep things very simple and explain the common-sense reason why the accountant is right: Also, my sister in law owns a small restaurant, where they claim their accountant informed them of the same thing, where a portion of their business purchases had to be counted as taxable personal income. In this case, they said their actual income for ...


14

LLC doesn't really mean anything to the IRS. Your business filing requirements depend on how your LLC is treated for tax purposes. If you have a single-member LLC, then it's not considered a separate business entity by the IRS, you'd file a Schedule C like any sole-proprietor, and you only have a Schedule C filing obligation if your income is over $400 for ...


13

What I should have done in the first place was just ask them. From their customer support team: Thanks for writing in and for your interest in Square. It is perfectly acceptable to use Square for personal business, such as a yard sale. You do not need to have a registered business to take advantage of Square and the ability to accept credit cards. ...


13

You spend ten dollars You get back six dollars in tax relief Total loss of four dollars. This will always be the case unless the tax relief is more than the expenditure, which it never is. There are some ways in which this can become worth it: if the thing you are spending the money on would actually be useful, of it you might be able to sell it for more ...


13

Future income would impact the price you'd negotiate for the sale. And it may turn to profit for the buyer, but it has no impact on you today. You have the sale price, and whatever cost hasn't been written off. The time you put into it doesn't matter either, an hour to write the program or 5 years. Only your out of pocket cost is written off against the ...


13

I used to work in transfer pricing for 5 years so I know a bit about international tax (I am not an international tax expert by any means). Tax authorities don't generally care about transactions unless they're adversely impacted. US tax laws are usually written to say that intercompany transactions should happen at an arm's length price (i.e. fair market ...


12

If I were you, I would go to the bank right now, pay the $100 and close the account. I would stop the bleeding first then consider the fallout later. Do you own the account jointly with your partner(s) as a partner or does the partnership (a separate formal entity) own the bank account with you a named representative? Those are two very different ...


11

There are benefits associated with a cash only business (the link states a few). However checks made out to "cash" don't reap those benefits listed. For anyone on SE to say your barber hides revenue from the IRS would just be speculation. With that said there are a great number of disadvantages for a cash only business. And from my experience, a business ...


11

In addition to finding another woman investor, you have an equitable option that is not unreasonable: ask your partner to buy out 3% worth of shares from you (which then gives her 54%, allowing you to then sell 5% to an investor and have it not dilute her below 51%: .54 * .95 = .513). That keeps you whole but also keeps your woman-owned-business status.


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