Today TaxMama hears from Terry in Texas, who has this common situation. “I am an independent consultant for two companies and sell jewelry on the side. Should I have a separate business account for each business? Or can I have one account; and make sure a have good records?”
When it comes to your tax return, you will need two separate Schedule Cs – one for each business.
You can set up your bookkeeping to accomplish this fairly easily. Either set up separate company files in your QuickBooks or other accounting system. Or, if you use QuickBooks, you can get the same result by setting up a CLASS for each of the businesses.
When you code the entries properly, you can get a full report by each CLASS for your tax return.
But do you need separate bank accounts?
Not in the early stages of the jewelry business. Once you see that your sales are about to be high enough to support you – set it up as a full-blown business, with bank account, appropriate licenses – and all.
OR if you already have a solid long-term plan in place to generate volume sales, set the business up properly right from the start.
Chapter 1 of Small Business Taxes Made Easy will walk you through the steps.
And remember, you can find answers to all kinds of questions about multiple businesses and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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