Sole Proprietorship... 1099?

Question

Hello all,

I recently started a sole proprietorship and advertise (mostly posters, some
professional journals etc.) with my companies name. We're basically a hired
gun that does business services for other companies. I am the only employee
(my wife sometimes pitches in). Armed with this information here a couple of
questions for you all.

I have been keeping track of all my income via quickbooks so even if I do
not recieve a 10-99 from customers I know how much I've recieved. What would
be the consequences of someone sending me a 10-99 in my actual name instead
of the companies name? Since it is a sole proprietorship would there be an
issue at all?

So far I've simply been using my personal bank account for both personal and
business use. Since I am only a sole proprietorship can I open a business
checking account, to make my life easier? or would I need to form my
business a different way in order to accomplish this?


Thank you all,

Answer 1

Hello
Theres no issue at all on your 1099 question. You don't send them in with your tax return and your tax return has your name on it. Your Schedule C has your name and dba, anyway it all goes by your ssn. Opening a business checking account is the one thing you should do. Being a sole proprietor it's important to separate business from personal life. Your bank may want your state issued business license or may not. If you pay your wife for her help and the IRS finds out they will call you a partnership,which makes taxes much more difficult for you.

Good Luck

Answer 2

1. Even if you are a corp. you can still use a schedule C for taxes, save yourself some money instead of filing a bus. return. Since you are a s/p, income will flow over to the personal side of your taxes anyway. ANyway, do a schedule C then you can allocate your 1099's to your schedule C business as appropriate.

2. Having a separate business and personal account is an excellent idea. It will be easier to justify/track things from the stand point of the IRS. Plus then if you do quickbooks online and you have a participating bank, you can just transfer bank info to quickbooks without having to manually enter anything, it is fabulous. IT would definately save you time.

Answer 3

Since you are a sole proprietor the 1099 in your name is no problem. I would recommend opening a separate business account even as a sole proprietor.. it's a lot easier to keep track of your income and expenses that way... You could file a trade name and continue as a sole proprietor. The trade name could be something different or if you prefer using your own name it could be something like Your Name Services ...

Answer 4

All 3 above answers are very good, correct and to the point, I would like to add that in some states, in order to open a business Account, the banks requires that you file a fictisious business name statement, and you can do that at the local city hall.
Good luck in your business.
RL

Answer 5

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