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Savings Account

Discussion in 'Business Operations' started by grass_cuttin_fool, Feb 6, 2006.

  1. grass_cuttin_fool

    grass_cuttin_fool LawnSite Gold Member
    Posts: 3,503

    I have a question, it may seem silly but here it is. Do any of you have a savings account in your buisness name? Is there anything legally I should know about it? The only thing I can think would be that the intrest that the money would earn would have to be reported for tax purposes. Any one have ideas or suggestions?

  2. grass_cuttin_fool

    grass_cuttin_fool LawnSite Gold Member
    Posts: 3,503

    Ive had 11 hits and no comments, BUMP back to the top 1 more time
  3. jims5964

    jims5964 LawnSite Member
    Posts: 23

    sorry I don't have a savings account in the company name, I would talk to your accountant for advice.
  4. I've got a small savings account and its tied to the checking account only for the fact if somehow the checking got over drawn it will take care of it, kind of a safety net, its never happened though. Interest is no problem as its small.
  5. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Posts: 4,771

    I changed banks in the last month or so (and wait a pain the ass that was) and started a small business savings account. I will setup, with online banking, to automatically draw a salary, on a weekly basis, that will be transferred from biz checking to personally checking. I will also setup a percentage of salary to be automatically transferred from biz checking to business savings for taxes.
  6. Littleriver1

    Littleriver1 LawnSite Senior Member
    Posts: 811

    I use a savings account and it's no bigdeal. I also buy a 6 month CD every month in the amount on my loan payments for a safety net. If you don't use it the bank will roll it over for another 6 months. It's nice to have some reachable cash if you find a good deal on equipment. At tax time the bank will send you a 1099 or something of equil velocity. It has worked so well this year I'm going to switch to 12 month CD's.
  7. grass_cuttin_fool

    grass_cuttin_fool LawnSite Gold Member
    Posts: 3,503

    Ok thanx for the info guys, Im a solo operator, its not like im a multi million dollar CO. I figured long as the intrest got reported to the IRS there wouldnt be any complications.

  8. lafrance4078

    lafrance4078 LawnSite Member
    Posts: 246

    Not sure if your using Quick Books? If so, when you set up your banking, you can choose to set up a savings account. When you do this, it will ask you how much is in it, and what kind of interest rate you are getting. It will auto calculate how much you have made and make a journal entry for that amount. This way, at the end of the year you know how much extra to pay in taxes. It will be the same thing as any other income you have. I am pretty sure that this is the way that it will work.

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