Hi guys. I have asked similar questions before, and others have to but I just need this one final clarification...

I am starting a sole-proprietership (i know i should do a corp, but i'll do that later right now I want to keep it as simple as possible). This is the system I am thinking of:

1) Open a checking account for my business
2) Deposit all my software sales in it
3) Manage my deposits with software such as quickbooks
4) Then when its time for taxes do the numbers and simply withdraw whatever the amount and pay to the government or let a tax service like h&r block do it

Can it be this easy??? This is my first time doing this... I want to keep this as simple as possible, please give me your advice.

Thanks.

Yep.

Actually, you may be able to make it easier by skipping 1. Since you are a sole prop, there really is no compelling reason (other than helping in the case of an IRS audit) to have a separate checking account.

Anthony

Yah. That about sums it up.

The thing to remember (and a strong reason for having a separate bank account for your business) is to keep back enough money for taxes.

Most people aren't used to having to handle tax withdrawals on their own. When you work for someone, they do (most of) it for you. When it's just you, you get to do it all.

In the USA, a big "gotcha" is the "Self Employment Tax", which is the ~7.5% "extra" that you owe for FICA.

So be prepared.

-David

I am starting a sole proprietership as well. I am going to file my DBA soon. I thought I would need a bank account under the assumed name to deposit checks from registration services. Or are these checks made out to the business' legal name (i.e. my name).

Also, I read that you need to make estimated tax payments every quarter if you will owe over a certain amount by the end of the year (I think it is $1000, but that is jsut a number I read somewhere) I think that is if your Federal + Self Employment taxes are going to be over that.

I am starting a sole proprietership as well. I am going to file my DBA soon. I thought I would need a bank account under the assumed name to deposit checks from registration services. Or are these checks made out to the business' legal name (i.e. my name).
I'm not sure on how the checks are going to be cut; I'd check with the reg service to find out for sure. If you can get them in your name, then you won't need to get another account; but as others have pointed out before it's not a bad idea to have a business account.


Also, I read that you need to make estimated tax payments every quarter if you will owe over a certain amount by the end of the year (I think it is $1000, but that is jsut a number I read somewhere) I think that is if your Federal + Self Employment taxes are going to be over that.
This is true, but there are so many specifics involved with it that you really need to talk with a CPA or tax attorney.

For example, we need to pay self employment taxes for my wife's daycare, but the child tax credit covers those payments until you've used them up. Which reminds me I need to find out at what point we need to actually start depositing self employment tax...

Anthony