My spouse (single bread-winner) lost his job in past due July 2018. While looking for careers, he worked with local homeowners and received payments–which went through our personal bank–for that work. We didn’t have a business permit or Sales Tax license. I have to file our personal taxes (extensions) and a 1065 for the LLC Partnership. Problem is I have no idea what to do about the amount of money that he/we gained prior to being legal. My retired family friend CPA says it must go through the business as income. My question is how to it is put by me into QB? Do I create proper, taxable file and invoices late sales tax returns on it?
If not that way, is there another “okay” way to account for it? Is there a way to prevent the unavoidable? Can’t really say about the sales taxes. If you know for certain sales tax was due and wasn’t paid, although it’s probably best to get the return filed and taxes paid asap. Probably smart to hire someone to review the work done up to now and get everything create in the years ahead.
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Yes, we will work with a CPA on it now. Thanks for your input. Do you know that you’ll require to be collecting sales tax? Typically, that only applies to the sale of goods, not services. What does the business do? It really is in Washington State, it is my understanding (I possibly could be wrong) a Sales-type tax, of universal percent, is assessed to virtually all transactions. The nature of the business is service (handyman, mostly) but there may have been some goods sold as well.
Our state (WA) assesses a sales-type taxes on services, as well as retail sales. Do I create proper, taxable invoices and document late sales tax returns on it? Were you collecting sales tax? In every state I have ever handled (US), that didn’t matter. You must pay it still.
No. We didn’t evaluate or collect. It had been in the nature of “neighbors and friends assisting a neighbor and friend” that was needing supplemental income. It had been BEFORE we started the business and got certified. The business income for that time period would just be included in schedule C because at that time he was working as a sole proprietor.
The reality that there is no license makes no difference. Would it be looked at the SAME business is my question since The Business didn’t exist at that time? I have to consult an attorney, I understand. But I’d be curious what kind of explanations or semantics we’re able to consider. What state do you live in? Problem is I don’t know what to do about the money that he/we gained prior to being legal. If the income prior to starting the ‘business’ was just you, then it is its business and requires distinct accounting.
Remember – a LLC is a disregarded entity. This means that things are treated a similar tax wise as though the LLC did not exist. Remember – a LLC is a disregarded entity. This means that things are treated a similar tax wise as if the LLC did not exist.