PDA

View Full Version : ****solo Operators****


Love2Mow
02-16-2005, 06:39 PM
This question is for companies that dont have employees at all.

How do you guy pay yourself. Ive been going for 5 years now and pretty much take everything I make and put it in one account. I use the same account for my company and my personal use.

Do any of you pay yourself a salary? Or hourly? If so what percentage do you use of your monthly gross and how often do you pay yourself?

richmadmax
02-16-2005, 06:46 PM
I'm new to the this work. i'm doing it part time. I just know you have to keep two accounts. don't mix personal and business together. also find out how much expenses and put some aside for further stuff. The rest is your pay.

Love2Mow
02-16-2005, 06:49 PM
I'm new to the this work. i'm doing it part time. I just know you have to keep two accounts. don't mix personal and business together. also find out how much expenses and put some aside for further stuff. The rest is your pay.




So your saying average out what you think you need every month for expenses and put that into a seperate account?

Woody82986
02-16-2005, 07:16 PM
I am solo. I keep two accounts. One that all transactions run through, and one that I keep personal money in. I look at my earnings for the month, decide what I want to pay myself for the month and pay myself that amount. That amount goes to my personal account from my original account. The rest stays in the original and is used for expenses.

richmadmax
02-16-2005, 07:17 PM
this is what one person said why you most keep business seperate from personal. Plus make sure you get insurance about one million. any question just ask, most people are great here. They were all new at one time, just some of them forgot what it was like................................................................................................ ....




You are going to want to file for for S - Corp. The difference between filling as a corporation and a sole - proprietorship (or partnership) is in the taxation and business ownership.

If you choose to be a sole proprietor then you personally are considered the financial entity of your business. This means that if your business is failing and the bill/tax collectors start a calling, they have a claim on all of your personal belongs, including your home. The good things about a sole proprietorship is the tax fillings are more simple, and you are only taxed on personal income.

Becoming a corporation is a little more of a complicated filling, but it seperates you from your business entity. This means that if you get sued for millions of dollars becuase you ran little Jimmy over with a mower, then they cannot touch your house and personal belongings. The downside is facing taxation at both the corporate and personal level. Your money gets taxed twice. I would consider this the best life insurance you can ever have. S - Corp is a filling for a small business where they can get around the double taxation. As long as your business is small (under 75 employees) then you can use this filling.

But like everyone else said. When you are in business you need your attorney on your right side and your accountant to on your left. Without these two your asking for trouble.

ksland
02-16-2005, 07:18 PM
I pay myself only what I need for my personal expenses.

Southwest Lawns
02-16-2005, 09:16 PM
My business is set up as an S-corp and my business cuts me a check monthly.

nriddle77
02-16-2005, 09:20 PM
You need two accounts. One is personal, and one for the buisness. It makes record keeping so much easier. Keep track of all your reciepts and expenses, and bring them to your CPA. He'll know everything that is deductable.

Carolina Cutter
02-16-2005, 09:21 PM
I am solo. I maintain a business account that is completely seperate from my personal account. I basically put myself on payroll. I pay myself based on the hours I worked for the week and the rest is business money, that way the business can support itself. I used to just take what I wanted but I always seemed to be starting over every year....LOL

plateau lawn care
02-16-2005, 09:30 PM
just for your info just because your an s-corp doesn't me they can't sue you also someone can try to sue any comp. and anyone personally like a civil suit

lawnguyland
02-17-2005, 12:07 AM
As a sole prop. I do have separate accounts, but I only use my business account. It makes absoultely no difference to me which account the money is in at the end of the year as I'm taxed the same. Why bother writing checks to myself, it's all mine anyway. I keep expenses separate by using personal and business credit cards (amex due each month), but other then that if you are a sole prop, not inc. then really what's the difference. At the end of the year I have what I have weather it's in my personal or business accts.

mtdman
02-17-2005, 12:10 AM
You should keep the business account separate from the personal account.

Kelly's Landscaping
02-17-2005, 12:29 AM
So your saying average out what you think you need every month for expenses and put that into a seperate account?

180 degrees from me I for one like to see my business grow and fast. Instead of bleeding every available cent out of your business another way is to figure what you need to have personally and only take that. The rest stays with the business and the future purchases get allot easier. Plus when that number does get large it is sweet to cut yourself a 25,000 or 100,000 dollar draw check think of it as forced savings. What ever you need to tell yourself I for one do not like balancing the check book at all times so its nice to know I do not have to either since I am in no danger of bouncing anything. Of course I am not solo but the principle is the same with this question.

As for getting sued and Corporations bottom line is this you want to be treated like a business then act like a business. There is something called a corporate veil that can protect your assets but if they prove you do not act like a corporation then they can pierce your veil once that is done so are you.

walker-talker
02-17-2005, 03:43 AM
Really, you only need one account if you just keep track of expenses. I personally have two and that was for one reason, to build credit in the company name.

moremowing4me
02-17-2005, 05:11 AM
Really, you only need one account if you just keep track of expenses. I personally have two and that was for one reason, to build credit in the company name.

Well said. I am the same way. I do however put about 1/3 of my gross into my personal account. The rest goes into the buisness account and just sits there for new equipment and such :cool2:

mtdman
02-17-2005, 10:29 AM
Something that I thought I should point out as well. If you are a corp or llc, you really need to keep it all separate. If you get sued a lawyer will try to prove that the business and you are not really separate entities, which negates that level of protection that those give. It's called piercing the corporate veil. If they can prove that your finances and the business finances are one and the same, the extra layer of protection the corporation and/or llc provides is gone.

And it just makes for good business sense as well.

cward
02-17-2005, 10:59 AM
Well said Walker. I'm a sol. prop. I have 2 accounts. My son and I each get 20% of the revenue, monthly, with the remaining 60% staying in the business account.

Precision
02-17-2005, 02:07 PM
Listen to MTD man. If you have one account used for everything you are a goner if you ever get sued. As in left without a penny. And any insurance you might carry may try to weasel out based on lack of a true corporate structure.

The best way to do things is to pay yourself a weekly or monthly salary. Whatever is right in your case. If you set a reasonable salary for yourself, then the business can't afford to pay it, you know you are doing something wrong (spendingmore than you earn). And if you keep everything in one acct, how are you paying your quarterly taxes / income taxes? How are you determining your business expenses? Co-mingling is an IRS agents dream.

lawnguyland
02-17-2005, 04:44 PM
Listen to MTD man. If you have one account used for everything you are a goner if you ever get sued. As in left without a penny. And any insurance you might carry may try to weasel out based on lack of a true corporate structure.

The best way to do things is to pay yourself a weekly or monthly salary. Whatever is right in your case. If you set a reasonable salary for yourself, then the business can't afford to pay it, you know you are doing something wrong (spendingmore than you earn). And if you keep everything in one acct, how are you paying your quarterly taxes / income taxes? How are you determining your business expenses? Co-mingling is an IRS agents dream.
Good points here and in the past few posts as well.