108

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 ...


108

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.


77

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 ...


76

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 ...


57

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 ...


45

What nobody else mentioned yet is what you could do from now on. If you consider your current savings enough of an emergency fund, you can look into regularly overpaying your loan from now on. How much you keep in an emergency fund is your own personal choice. Typical advice is 3-6 months full expenses (rent/mortgage, bills and necessities such as food), ...


45

Let me first say that I am not an accountant. I recommend that you do meet with an accountant; he or she will be able to tell you the best way to handle this. That having been said, I'm going to offer you one idea for handling this. Probably the least complicated way to structure this is as a separate sole proprietorship for each of you. You would claim ...


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 ...


35

It sounds like you have some very real income risk, so I would not drain my savings completely just to get rid of the loan. I don't know how long £5000 would last you if you lost your job, or how long it would take to find a new job (even one way below your skills) to know how long the fund needs to last, but you could use some of it just to reduce the ...


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 ...


33

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 ...


28

The answer is simple in my opinion: Don't form a General Partnership with someone you barely know on the internet. The General Partnership is something that makes it easier to start a small business with multiple people who completely trust each other, like maybe a farm run by the whole family unit, or a store run by two close friends. A counter example ...


27

I'd form an LLC, with the partner (or not). (I used Legal Zoom to do this, a few years ago. Today it costs $79. (There may be some minor state fees, no capital requirements in my state.)) Get a bank account in the name of the LLC. Connect bank account to Patreon/Paypal. Have funds go into bank account. Transfer funds from bank account to your account and ...


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.


22

There is no rule of thumb that can be used to separate the amount paid in interest. The reason why so much interest was paid was because when you don't pay it off each month the new charges immediately start being charged interest. There is no grace period when you carry a balance. If you were carrying a balance before the business started then the interest ...


21

What you have there is a General Partnership. You already have a General Partnership. You didn't need to do anything to create it, it just arose when you agreed to share revenue. In this situation you split income and expenses as far as the IRS is concerned. You don't get much flexibility in how this is done, because you have a General Partnership and ...


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 ...


17

Real estate taxes for your home are deductible as an itemized deduction on Schedule A whether or not you own a business. The phrase “wasn’t used for business” that you see on Schedule A really means the amount that wasn’t deducted as a business expense elsewhere. So yes, if you are itemizing deductions, you can include the real estate taxes for your home on ...


17

Both of us want to remain anonymous and don't want to even tell each other each other's names. Is there any way to do this anonymously? Yeah. Fire up those Wyoming LLCs. An LLC can be a general partner. It's perfectly legitimate to have a general partnership between "New Start Flying Wings LLC" and "Not Slightly From Wyoming LLC". Note ...


16

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 ...


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 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 ...


Only top voted, non community-wiki answers of a minimum length are eligible