How to Pay Yourself as a Sole Proprietor || what accounts and systems you need to pay yourself $$

Have you started your own one-person sole proprietorship business, and you want to know the logistics of how to pay yourself?
While you can mash up the business money with your money, as a sole proprietor, it is a terrible idea! In this video I share why you need to create a process and the accounts and systems you need to get your money.
In the video I talk about estimated taxes - here's the info:
www.irs.gov/bu...
and the form: www.irs.gov/pu...
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Legal Disclosure: I am licensed to practice in the state of California and before the United States Patent and Trademark Office. Information contained in this video is not legal advice - please seek advice of counsel. This video and description may contain attorney advertising.
Disclosure: My videos may contain reviews, recommendations, testimonials, or endorsements of other businesses, individuals, events, materials (such as books), products, services, or websites. At this time I do not receive any monetary compensation or affiliate revenue for such content. I occasionally receive free access to a service, product, or program in order to provide a review; if so, I will clearly disclose this in the video.
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#soleproprietor #smallbusiness

[@ElizabethPW]

here's a playlist on how to setup and run your sole prop business: kzbin.info/aero/PLd0wcIHXfOTd__4_opsnb4cd9IXUPLiWa

[@jupitersky]

Well then, the KZbin algorithm just threw this at me seven hours after being uploaded. Wild! Good and informational video. I like the conversational style of presentation.

[@ElizabethPW]

Glad you think so!

[@ColdBrewBarbie]

quick books also have a feature to see a profit and loss statement, I found that super helpful to understand how my business was performing!

[@ElizabethPW]

Thanks for sharing that -- great reminder that most apps like quickbooks have a feature for profit & loss!

[@mindsetengineered]

I appreciate your clear explanation and great cadence. Listening at 1.25 speed was perfect!😀

[@sewingseeds.]

I love how you explain things!

[@bigfig623]

I love your videos that explain the law I start an LLC I wish I would’ve found it first but thank you for making the videos that explain a lot specially for new business owner once again thank you

[@ElizabethPW]

Glad you like them!

[@bigfig623]

I found my LLC on June 30 within file and officially become an LLC on July 7 now I’m doing the whole process is not easy but you Splane a lot of stuff and open my eyes. I wish I would’ve seen you before I started.

[@Explore_Montreal]

Thank you. For the valuable insights. Please, how to get in touch for consultation and discuss the initial service cost for your expertise. Thanks

[@ElizabethPW]

I'm not taking new clients right now, but check out elizabethpottsweinstein.com for more info

[@Tiffany-RemoteOfficeGirl]

Thank you!🌟

[@X_Booby]

This has helped me alot! I totally appreciate the info! 🙏🙏🙏

[@ElizabethPW]

Great to hear!

[@lakishaprofitbush4970]

Thank you soo much for sharing!

[@TheBroknPezDispenser]

This was GOOD! Thank you

[@oscarv1234]

Thanks for the information I love your videos, I was wondering if I can open my small business using a vital address.

[@ElizabethPW]

Check out kzbin.info/www/bejne/jnfXqpiojLmDhdU and kzbin.info/www/bejne/i4rMqWyCo5qdgcU about virtual mailboxes

[@mireyaporcayo4101]

Hi would you please do a video on how to pay yourself when you have an LLC and I'm a sole proprietor? Thank you!!

[@ElizabethPW]

here you go kzbin.info/www/bejne/i4XagmCKfdiXfK8

[@dianaarroyo4189]

Great and informative videos! I just started gig work on Wag (which is a dog walking app). Most of my clients are on the app and I wanted to set up a Sole Prop. (I’m in California.)I have another full time job with insurance and is in a completely separate field. I use one CC for gas and dog treats, bags, leashes, etc. I have separate liability insurance specific for dog walking as well. I get paid from Wag via Stripe & after watching this video, I’m getting a separate bank account for this. My Q to you is, by taking the step of registering for a Sole Prop, would that allow me to claim things on my taxes such as my gas mileage/gas used to transport myself to and from clients homes & on my other business expenses such as doggy treats, poo bags, leashes, my car keep up, cell phone, etc? Would having a sole prop also help regarding taxes due at the end of the year? I apologize for the long winded question! (Been having a hard time finding the exact answers to my questions online)

[@ElizabethPW]

Well really you are a sole prop as soon as you start making money in your own business, even if you don't file or register. You can claim things on your taxes (schedule C) that are necessary for the business. There are a lot of rules of course. Check out books like www.amazon.com/Tax-Savvy-Small-Business-Complete/dp/1413330401

[@sewingseeds.]

I have two personal bank accounts. One I share with my husband. Can I use the second account as my business checking for my bookkeeping business as a sole proprietorship? I can transfer my paycheck to our joint account when I want to get paid. Or is it mandatory by law that it needs to be a business bank account? Thank you for all you do💕

[@ElizabethPW]

For a sole proprietorship you could just use your personal account. The main issue is if the bank cares (they might)

[@sewingseeds.]

@@ElizabethPW You’re the best! Love your content and how you teach. Blessings

[@jessicaholloway8850]

I’m a sole proprietor and wondering if I need to open an official “business bank account” or can I just open another regular account and pay myself that way?

[@ElizabethPW]

You are not requried to. I think it is a good idea to have a separate account because it makes it easier for taxes and such

[@marcfruchtman9473]

Thank you for this information. Do you recommend creating an LLC vs a sole proprietorship? I am curious when a sole proprietorship would actually work better vs LLC?

[@ElizabethPW]

check out this video kzbin.info/www/bejne/a3TPcn2PjLl_iKM

[@DaiShuryoTechnus]

When should I pay myself? I haven't touched my revenue at all, since it's under $1k, and I'm not sure if I should pay myself yet.

[@ElizabethPW]

Well you need to set aside money for expenses, so think about what expenses you will have by the end of the year. Or you could pay yourself out then.

[@kat4animals004]

Thank you Elizabeth. Very helpful video! My sole proprietorship business was created in in California in 2022. I have not yet filed my fed or state taxes for 2022. In fact I am 2 years behind in taxes. Even though my business was created in 2022 a trailer for my business was purchased in 2021. My business was not in operation during the year the business vehicle was purchased. This business trailer was purchased Aug 2021 and was not used for business or personal. Do you have experience with this type of situation? Any suggestions you may have are greatly appreciated. Would it be best to only claim the 2021 business vehicle purchase in 2022 because that is when the business started? But the purchase date shows otherwise. Thanks for your time.

[@ElizabethPW]

Expenses you have before you start operations are usually startup expenses and are deductible (with particular rules) or amortized, check this out www.irs.gov/newsroom/heres-how-businesses-can-deduct-startup-costs-from-their-federal-taxes

[@soenso22]

Does it matter how you transfer money from your business to personal account? Would you advise linking the two and doing transfers that way?

[@ElizabethPW]

That is what I do, but you can also write a check, if you have checks

[@soenso22]

Thank you@@ElizabethPW ! Appreciate your videos & guidance 🙌

[@bailout007]

Should i convert my llp to s corp which is me and my daughter who is 8 yrs old, as owners and the business is 4 years old currently

[@ElizabethPW]

It really depends on how much money you make, since it would mostly be for tax reasons

[@bailout007]

@ElizabethPW yes tax purposes and I'm seriously thinking about moving the business to Texas in 18 months, business is currently in NJ and I live in NY so I'm being double taxed for business and personal right now. Would that make a difference in the previous question??

[@SNRTALES]

Great info. Thanks

[@ElizabethPW]

welcome!