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end of year bank acct balance?

Discussion in 'Business Operations' started by thes, Nov 2, 2004.

  1. thes

    thes LawnSite Member
    Posts: 106

    Obviously this is my first winter on my own. This question goes out to all of you accountant types...hahaha

    I was wondering if I should transfer all the money that I know I'll *personally* need for household expenses from my business acct into my personal checking acct BEFORE Jan 1st???? Or should I leave it in my business acct and take a weekly draw as needed throughout the winter into spring???? I am not sure if this makes a difference with tax returns....and if it does, what IS the difference? Btw, I am a sole proprietor.

    Thanks in advance
  2. lawnMaster5000

    lawnMaster5000 LawnSite Senior Member
    Posts: 589

    As far as tax purposes - it does not make any difference how you chose to hold your money. Since you are a sole proprietor it is all considered yours no matter what type of account the money is in.
  3. Mdirrigation

    Mdirrigation LawnSite Silver Member
    Posts: 2,630

    You need to get rid of all your money before the end of the year , email me and I will tell you where to send me a check . seriously You need to check with your accountant .
  4. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    If you were incorporated, as I am, you would want to get rid of a lot of it out of the biz account at year end. Even if it goes to you personally. It gets taxed at a higher rate for the corp as opposed to you personally. But there are rules for all that. Red flag if you make more in dividends than salary.

    But you are a sole prop. so I have absolutely no clue. Seek advice from an accountant.
  5. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    basically once you have deposited money into your business account through the year it is already totaled up. There is no way to "get rid of it" for taxes.
  6. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    tiedeman - it gets taxed at different rates depending on if it is copporate profit or your salary. Or if you spend it on things considered "expenses"
  7. bruces

    bruces LawnSite Senior Member
    Posts: 648

    For tax purposes it does not matter. The money is yours whether it is in the business account or personal account.

    The only way to make a difference is if you spend some of it for business purposes.
  8. thes

    thes LawnSite Member
    Posts: 106

    I will check with an accountant just to be sure...but I guess since I am a sole prop....deductions *will* be the thing that makes the real difference for me, as far as taxes go.

    Thanks for all the info...it is much appreciated. :)
  9. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    This is the exact correct answer and as A SP you have to pay taxes on the total anyway regardless of which account.

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