Chase Bank gave me a $75 bonus when opening a free checking account with a free business account, but my h & r lady told me I'm supposed to use a different tax form called "1040 schedule c" for decorating consultant rather than reporting taxes as a business. I'm totally new to this since it's my 1st year reporting taxes. I would like to keep my business account so I can be able to separate business from personal, but since I'm not going to use the business name, am I supposed to close this acconunt and return the $75 bonus? or do you think they will let me keep the business account & the bonus?
2006-12-30 16:06:00 · 4 answers · asked by Daisy 1 in Business & Finance ➔ Taxes ➔ United States
Chase Bank will send you an interest statement, Form 1099INT or equivalent. This will include the bonus money you received, and is included on your tax return.
The Schedule C of Form 1040 is part of the individual tax return. Your consulting income and expenses are recorded on this schedule, and the net is included in your taxable income.
You do not have to close the business account. The name on the account can be your personal name even if it is for your sole proprietor business.
2006-12-30 16:53:17 · answer #1 · answered by ninasgramma 7 · 0⤊ 0⤋
It sounds like you are operating your business as a sole proprietorship, which for income tax reporting purposes, is a business on Schedule C of your personal return. You can use the business account to separate your business activities from your personal activities. The business account's name will probably be "your name dba(doing business as) business name"
As for the $75 bonus for opening the account. Is it for opening a personal account, or is it for opening the business account? You should get a 1099-INT for that amount. If it is for the personal account, you will report this "interest income" on Schedule B and the front page of your Form 1040. If it is for the business account, you will report it as part of your business income, which will then be netted by your business expenses, and finally reported on the fron page of your Form 1040.
Just because you are not operating as a partnership or corporation, etc., it does not mean you cannot use the business bank account for your Schedule C Business (sole proprietorship).
Hope this helps.
2006-12-30 16:48:13 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Form 1040 Schedule C IS reporting income as a business. Specifically as a 'sole proprietorship'. This means you and only you own the business and report the net income on you personal tax return. The $75.00 will be considered interest income and you should receive a 1099int. You should definitely keep the business account separate from you personal finances. Your friend at H & R Block appears to know what they are doing. They may not have expressed it clearly.
2006-12-31 02:26:06 · answer #3 · answered by STEVEN F 7 · 0⤊ 0⤋
Schedule C is how businesses report if they are not a corporation or partnership. Is for sole propriotors. You use the business name as a dba on it so no impact on bank account. Can keep.
2006-12-30 16:48:51 · answer #4 · answered by vegas_iwish 5 · 0⤊ 0⤋