I would suggest writing a check to yourself but code it against 'owners draw' in your accounting system. This will make it easier to track...

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"

That makes sense. Thank you for the information Lily!

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Sarah Mosure

Thank you for a wealth of information. We are in Oregon, right on the border of Washington state, and heading back to California when the opportunity is right. We end up doing business in many places -- so it gets confusing, but helped a great deal!

Thanks and back to research.....

This will come in very handy as I contemplate forming an LLC.

Judy

I have a llc basics brochure that I would be happy to email you if you pm me with your info. (This offer is, of course, for anyone who is interested).

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"

Thank you Lily for this information. I know the chat was a while ago -- but the information is so very valuable.

I have a question - what are the differences between a Single Member LLC and a Sole Proprietor (taxes, filing, etc)? I contacted my state and an attorney...but I am still a bit confused. Sometimes I get the feeling that the state doesn't really know (at least the person I spoke with) and the attorney just confused me. Since you explained LLC Basics so well in the chat; maybe you can enlighten me?

Darlene

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Darlene Victoria Gonzalez
The Voice & Vision Behind Your Business

Originally Posted by D_Victoria_Virtual_Assistance

I have a question - what are the differences between a Single Member LLC and a Sole Proprietor (taxes, filing, etc)? I contacted my state and an attorney...but I am still a bit confused.

The short version is... nothing! For tax purposes, the IRS considers income received by both sole-props and llcs to be 'pass-through' income. In other words, the income is considered to be yours, not your companies. Most states follow IRS regs, as well.

So... whether a sole-prop or a llc, treat your income the same way. Make your required tax deposits to the feds (April 15, July 15, Sept 15, Jan 15) - I recommend 18% of net income for each period - and check with the state for their LLC required tax deposits (if any - many states don't have a requirement).

I will be giving a 'Basic Bookkeeping' chat tonight in the VAF chatroom (click here to get info) and will be happy to answer any additional questions you may have at that time.

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"

Thank you so much for this. I found it very informative. This website is truly a blessing.

I believe you might be incorrect about the taxable income. See Schedule C on the IRS website.