How do you handle taxes and other bookkeeping questions

[toejoe2k]

In looking at opening a dojo in the future, I was wondering how our U.S. instructors handle taxes. Do you count all of the school's tuition and other sources of income toward personal income or do you seperate it out into income for the business and set up payroll accounts, make deductions accordingly, etc.?

I can see refraining from co-mingling funds and paying myself out of that to generate a 1099 form for myself at the end of the year. However, how do I ensure that I'm paying taxes for the business? This is all very new to me.

Many kind thanks to all who reply.

~Bill Richardson

[MakotoDojo]

Hello,

I suggest Incorporating either C or S corporation or Limited Liability Company (my favorite). There are many reasons for doing this not the least of which is limiting access to your household income and assets in case of litigation. There are many tax benefits as well.

HTH,

[BlackPaladin]

In looking at opening a dojo in the future, I was wondering how our U.S. instructors handle taxes. Do you count all of the school's tuition and other sources of income toward personal income or do you seperate it out into income for the business and set up payroll accounts, make deductions accordingly, etc.?

I can see refraining from co-mingling funds and paying myself out of that to generate a 1099 form for myself at the end of the year. However, how do I ensure that I'm paying taxes for the business? This is all very new to me.

Many kind thanks to all who reply.

~Bill Richardson

I have been a consultant for 16 years.

Either you have to learn these things, or hire someone who knows.

I recommend people take the time to research the advantages and disadvantages of the various business entities, and also learn the basics of bookkeeping, accounting, and the business and tax law for their municipality.

Then, you are in a better position to see whether or not you need to hire a professional to take care of these things. Many people have the aptitude, but not the time nor the desire to mess around with these things.

[Brian Owens]

My first step would be to take advantage of some of the tax dollars you've already paid by paying a visit to the Small Business Administration.

They have many pamphlets and booklets available that can help you in getting started, and they have advisors available through the SCORE program (Service Corps of Retired Executives) that can help you navigate the waters of getting a business license, setting up your records system, incorporating if you choose to do so, etc.

HTH.