How to Pay Yourself as a Sole Proprietor

[@PeachInTraining]

I've been in business for 4 years. NEVER has anyone been able to explain the "numbers" side of things to me in terms I can understand. THANK YOU!

[@LYFEAccounting]

Glad we were able to help!!

[@TheSMiLive]

ditto

[@Ashley21138]

Right! Wish I could like this video a million times

[@ItsSunshyne]

I started my business a year ago then did a sudden move to another state... I have come to the conclusion that I am in fact, a sole proprietor. I am thankful for this information.

[@jafquist27]

By far, the easiest to understand, least scary, and inspirational explanation on sole proprietorship I have ever heard. Very well done. THANK YOU!!

[@laurabeverage9396]

Excellent video with great information. My husband just dissolved his corporation on the road to retirement but is now set up as a sole proprietorship to continue earning some money for a couple of more years. Thank you for this aid on that path.

[@kay_Sampleton]

How did he dissolve his corporation?

[@Twonne1]

He made the business tax situation so much easier to understand. Well said and laid out. Thanks

[@LYFEAccounting]

Thank you, Twonne!

[@terrynguyen9102]

I’m a sole proprietor. I love this video. Very helpful. Thanks.

[@evanrandolph5928]

Good explanation, very helpful. I didn't want a "business" but I have a hobby/side hustle that nets me a couple grand a year and I'm told that I need to keep records and separate that from my regular checking, and all kinds of other complicated nonsense that makes me want to give up the hobby entirely, as it takes more time to do the book keeping than I actually spend on the hobby.

[@mr.bidnessman2469]

Just don’t pay taxes bro.

[@KittyHelpDesk]

I'm so glad I found this channel. This is the clearest, simplest explanation I've found on this topic to date. You've won a new subscriber for sure.

[@bchaveezy]

IRS is criminal

[@norm021557]

I just love your videos. They are interesting, informative and fun...and just the right length. I have learned so much from you folks and I discovered you at the perfect time as I am in the midst of creating a new business. You have made the subject of taxes and business entities clear to me in a way that no one ever has before. Thanks to you folks my understanding has led me to greater confidence in going forward because I feel that I know what I'm doing (to at least some extent), and that my friends is a good feeling. I wish you folks where in New Mexico. Thank you so much and the best success to all of you in your careers and business. Blessings to you all. Norm M.

[@kksend4418]

You are so clear and concise. Thank you for explaining the steps without all this drag out, unnecessary explanations

[@islandstylecreations5686]

Just found this channel a few days ago and every single video I've watched so far has been full of AMAZING information!! Blessings to you guys for sharing such great content. 🙏🏼

[@jinjooc]

So easy and clear to understand! Thank you!!!

[@lisaalamin4373]

SOOOO clear! SOOOO helpful! Thank you, thank you!

[@lucasdidier6410]

Trying to ramp up my Accounting/Tax knowledge for sole props, your videos are gold! Thanks

[@JediWebSurf]

I'm a Sole proprietor. I'm thinking of just getting paid into a checking account dedicated for my business, then setting aside 30% for taxes and transferring that in a savings account. The rest of the 70% I'll just transfer it to my personal checking. If there is a business expense I'll transfer what's needed back into the business checking account and paying for the expense from there. That way every transaction is recorded there. What do you think? I will have minimal expenses since my services and products are digital. The most I'll spend on is advertising.

[@jacquelineoneill4523]

You’re right. There’s no other channel like this one and it is sooooo helpful

[@LYFEAccounting]

Thanks, Jacqueline! You're the best.

[@iExist666]

I am New to All these New Titles such an "Entrepreneur" as well as a "Sole Proprietor". I've been using my Hobby turned Skills to make money for the past 2 years . Thank you for clarifying a lot of questions I had .

[@picklemedillard]

Thank you for this concise step by step video! :) Finally! Someone has given me actionable and practical steps that I can implement today!

[@UziBlancoOfficial]

What if in my first year in business, I've spent more than I made, between gas, advertising, equipment, ect. ?? 🤔

[@harleyehuffinejr2432]

Thank you very much for sharing and I appreciate it all. I'm a sole proprietor. Diamond Dust Complete Exterior Building Restoration and Maintenance

[@Poeticfloyvonne444]

You Explained what seems very difficult in such simple form for us to understand. You are Amazing and I Thank You Soo much for Sharing Your Expertise ❤️❤️❤️

[@amberlights7043]

You answered all my questions in one video, as if I was there listing them out to you haha very helpful, thank you so much!

[@melissasantander5602]

Sole proprietor party!! Great channel, thanks for your informative videos!

[@kamiaque2970]

Great video! You guys are always providing so much valuable information, greatly appreciated 👍

[@mommonald224]

“Go ahead and rob the bank” 😂 I love your videos! I learn so much! I have a request: I need to move a sole proprietorship from my husband over to me (wife) as a 51% partnership. How will that affect our taxes? Thanks for the great content!

[@jaaziel9]

It won't!! Sole Proprietor pay taxes based on the business's Net Profit on a Sch C, regardless of who reports it.

[@jamesadams8450]

Thank you for the hard work and efforts to educate us small businesses!

[@geraldfirme1213]

Sir, Thank you for breaking it down for the novice like myself🤓 Retired Military Vet.

[@AnnaWinestock-f6p]

So clear and helpful! Thank you

[@zekepena1069]

Super helpful great explanation and information

[@zumbadiva33]

Is the income I pay myself and tax deductible expense? Also, what type of business credits are out there for a sole proprietor?

[@ylc8473]

Wonderful video 🎉Thank you so much

[@ileishasanders6969]

What if I'm starting up? How will I know what to pay from last year? And what if I'm funding my startup costs myself? Do I transfer money from my personal account to my business account? Since it's not really revenue....

[@DisciplesHeart]

I'm in the middle of funding and need to know if this is proof of income for banks or lenders?

[@stephen1503]

So for a services based sole proprietorship: If I charge $100 for a service, And it costs me $10 in tools, marketing, and other expenses to do the job… The government would tax me on the $90 the business made, since I am the business. My cost of labor is included in that $90. Like if I was to pay someone $20 an hour to do the job for me theoretically- and it took 2 hours. I can’t subtract that $80 from the $90 because I am the technician.

[@-What-are-your-thoughts]

This video has helped me more than you know. I am starting a lawn care business on the side and was thinking of saving 1/3 for taxes, 1/3 invest back into business and 1/3 salary. Is that a good starting point or do you recommend a different break down ? Thanks again

[@kevinlaster3156]

Thanks. Needed this. I subscribed

[@trevialee1902]

Thank you so much everything you stated I've been doing wasn't sure if I needed to do anything different but you clarified Thank you this was so helpful

[@s.y926]

Regarding the quarterly tax payments, I wondered if you could help clarify something. So for example if someone owed a total of $10,000 for taxes in 2021, are you saying the sole proprietor should pay it the following year on a quarterly basis? Or is the business owner expected to calculate owed taxes on a quarterly basis of the current year? Like instead of someone filing on April 15 2022 for 2021 taxes, they should file at the end of each quarter in 2021 for 2021 taxes? Or are quarterly taxes filed the following year. I don't quite understand.

[@GoaWay...]

Hello again. I have another question...well three. Please answer. 😁 Okay, first, I saw on the gov site where you get an EIN number, that sole props could get one, but I was wondering what if I change my business structure to LLC or Corp, would I have to get a new EIN then? 2nd) what business structure is better for a notary...especially a signing agent? 3rd) are you sure we get the same tax write-off s as an LLC... expedited depreciation or whatever it's called?

[@LYFEAccounting]

1) you would need to get a new EIN if your business entity change, but you can get it for free and easy 2) Depends, you got to watch our other videos on business entity and try to decide yourself 3) I think you mean accelerated depreciation hah, yes you can

[@GoaWay...]

@@LYFEAccounting Okay. Thank you for answers 1 and 3, and yes I meant accelerated depreciation. Couldn't think of the name at the time. 😊 As for number 2, I have watched this channels videos and many others, and still haven't been able to make a decision. ☹️ I mean like would a sole prop still be okay for a notary? And if I did change my structure, then went and got a new EIN, what happens to the old one for the former business structure? Sorry if I am asking too many questions. ☺️

[@jaaziel9]

@@GoaWay... As a sole proprietor you uses the same EIN, it doesn't matter how many different businesses you have. The only time you will need a new one is if the business structure changes - for example, from a sole proprietor to a Corp. Also, that EIN is yours for the rest of your life. If you no longer use it, IRS will retire it, but it remains yours.

[@percyflores7517]

i might be wrong but i dont think you need an EIN for a sole proprietor in the first place? you can use your social?

[@mmlg24]

@@percyflores7517 yes it's true. Wouldn't even bother unless you need EIN for business bank account. Which you only need if you want to accept credit card payments if you don't have a website that handles that for you like Shopify.

[@allaboutthebible]

Thanks, this is really helpful.

[@tammymitchell4770]

Thanks Sherman, great job!

[@AztecThriftStore]

Thank you King! This was super on time and helpful!

[@yesenia7274]

You're awesome! Thank you!!!

[@HamzaAliCreator]

have a question : Income & expenses as sole proprietor : Annual Earnings:I would also like to inform you that my earning being sole proprietor of XYZ for the year ended 30th june 2023 were 200k. i paid Tax on 200k. Monthly Owner draw:I have set my monthly owner draw at 3k from my business account to my personal account, However, this figure actually represents my monthly owner draw and not my salary. and the remaining i kept as retained earnings within the business account and can freely be withdrawn if needed. Monthly Expenses:My average monthly expenses range from 800 to 1500 which are typically covered by these monthly withdrawals. The remaining amount from my withdrawals is either saved. It is a good Explanation for the visa officer about my finances? OR something wrong ?

[@michaeltablate3790]

Thank you for the valueable information.

[@zanderhuynh7998]

Just want to confirm: Amount Paying yourself will incurs same tax as self employment tax as pay would pay on your w2 wage. Why should you pay yourself? As I understand you only beneficial to pay yourself as s corp status! Please explain if I understand correctly. Thanks!

[@mmlg24]

you pay self employment tax on your side hustle income regardless of paying actual cash for yourself or leaving all the cash in the business.

[@ThisIsHarderThanIThought]

i will be doing ebay starting 2022 as a sole proprietor from my home (basically bedroom/living room)...i have a bunch of personal electroinics/computers that i have bought (saved) as well as collected for free over several years span. also, alot of the stuff i will be selling in ebay, will be stuff i will be getting for free from friends, familiy members, relatives, and free unwanted garage sell left over items. so the only expense/deductions/write offs i know of will be: mileage, business supply expenses (mailing tape, shipping boxes, etc?)..can my phone number associated with my ebay account, can that be used as a deduction/write off? is there any other expense that im missing that i can use as business expense/write off? thanks much for your great video.

[@jennybui5295]

Hello ! I found your Chanel very helpful. The way you explain in detail that’s very importance to understand. Thank you I have a question regarding about pay yourself as a proprietor in this video . We used the money in business account to pay ourselves and how do we report to the IRS ? Thank you

[@frezialanders9117]

Do you offer an online course that goes more in depth on this?

[@Chrisreedbeats]

I’ve never seen a more detailed video on any topic. Wow a thousand thank you sir. Do you do zoom or phone consultations? I need helps sorting my life out. I know I am a sole proprietor now thanks to you but can you be a sole proprietor multiple times over? Like I make beats, I do photography, I charge different types of people for different types of service. Help.

[@salisburyguy1952]

This is the most understandable explanation I've seen in all my searches, thank you! I still have a 2 part question. Paying yourself this way is considered an owners draw correct? Is that still considered "income" as when applying for a personal loan, refinancing a home etc.?

[@johnwinter7590]

What if I don't pay my self an just leave the money in my business account is that a good way to keep my business running on the money in my business account

[@browndamon]

Excellent video 🎯 #bringyourworth

[@PennyxOfxIthaca]

Thank you for this explanation.

[@jesusreyes4394]

Wow you made it so clear thanks

[@RiverasHotWheels]

There’s a lot of questions in comments and most of them are not answered…

[@angelathomas1159]

Thank You !!!

[@artgal7]

Quick Question: How is the money you pay yourself categorized or itemized on your taxes? Thanks for a great video!

[@paullang9570]

Thank you

[@miguelsbeats8529]

As a sole proprietorship, will I also be able to use tax write offs to help me pay the difference in taxes at the end of the year.

[@LYFEAccounting]

Yes!

[@mikaylajones5125]

How do you know the amount of estimated taxes ??? 😭

[@mattr1296]

What do I do if I’m married with a business? Should my wife file “married filing separate”? Also, what do I do if I have a dependent? Awesome video!!

[@wedabneys6870]

I have a question. Can I pay myself once at the end if the year all my net profit just so it can be taxed then put it back in my company bank account? To avoid evading certain tax expenses

[@rhondaregister8081]

Can you do a video on differences between hobby income and business income, i.e., furniture refinishers, crafters, etc.? Does the implied perception still apply - can file losses for 3 years but should report a profit by 4th year if a business? I am a furniture restorer and upholsterer and have sold 3 pieces of furniture and completed 1 custom piece in the last few months. Am I correct in that I would claim money earned on these pieces but no deductions for supplies, etc., as hobby income as opposed to getting a business license/name/business account and being able to deduct expenses even though the "business" would be very small time? Thank you.

[@ssisters4343]

What if you have a full time job and your starting your side business?

[@tomislavlulic9330]

What if you hire an employee for your sole proprietary business, would their income be tax deductible?

[@DanielGarcia-ps9ti]

Does the self employment tax rate cover there federal tax rate? If not what is the tax rates on federal. Thanks

[@Yosizulley]

I have a questions I’m hoping you can answer. Everything you said makes so much sense but I’m wonder this, when you pay for something that’s a business expense say.. your business phone bill do you use your business card or your own personal bank account to pay it?

[@LYFEAccounting]

The cleanest way is to use a business card (and put the account in the business name). However, I’ve seen people still claim the deduction when using their personal card. You just have to keep up with your receipts and remember to add it as a deduction when tax time comes around. - Sherman

[@missnurseeri]

So 16% is a good amount to set aside for taxes, just to be on the safe side?

[@dbest4755]

I love Sole Props !!

[@ICANTLOOKAWAY]

Can I get a ein number being a sole proprietor and apply for business credit?

[@LYFEAccounting]

Yes, a sole proprietor can get an ein.

[@-What-are-your-thoughts]

How do you get a EIN ?

[@charlottejohnson3110]

@@-What-are-your-thoughts The IRS.

[@mohammadalamgir6096]

I want to start sole proprietor business for Accounting and Tax services what’s the process ein

[@obrien.travis]

How does the tax situation work if you operate a sole proprietorship and are also employed in a regular day job?

[@mmlg24]

your sole proprietor incomes gets combined with your W2 and report everything on 1040 and schedule C.

[@fg1698]

Please could you kindly make a Video about Start up cost Expenses & Organizational Expenses . I bought some clothing in 2018 when i travelled for a Vacation in Africa. I shipped them to USA hoping I would stock up more stuffs to sell them since. I obviously did not do my research well and now I know I have to register LLC and other business needs. Please can I still deduct this 2018 Clothing Expenses as a Start up cost for next year 2021 Taxes? I will really appreciate your favorable response . God bless you much more Amen

[@jaaziel9]

No, it can only be used as a business expense in the year that it was purchased.

[@daegaskins3340]

Thanks bruh,

[@LYFEAccounting]

Happy to help.

[@industryliaison]

Thanks for this video

[@jenerd.purijr6544]

Party just started!!

[@lilcoocoo7215]

Yup thank you

[@hannahfelix1516]

How do I make the switch from sole proprietor to LLC?

[@ssisters4343]

Thank you for this. If you are starting out and you are funding your business and still have a full time job working fir someone else how do you separate this. You have no sakes yet your investing in building your business. Do you deduct all this in your personal taxes based on the income from your full time job? Thank you so much

[@SarbjitSingh-oe6eb]

I like your channel.

[@LYFEAccounting]

Thanks Sarbjit! Keep watching.

[@stockmarketjay4693]

I pay myself through distributions as I make commissions

[@humblerojo6300]

1st year. Is it best to pay estimated taxes and all taxes using my business name’s EIN or should I just use my SSN? I’m confused on how this will work in turbotax. Will I have to pay turbotax twice to file as my EIN and then use my SSN# in a separate section or will I just be using my EIN for everything in turbotax?

[@nathaniellopez7326]

I just started a cleaning company, I also work a full time job. Would I still need to pay self employment tax if I pay it through my job?

[@asteroverseas1350]

Hi Can non resident start Sole proprietorship in USA for Amazon FBA before getting LLC. I have SSN while I was student in USA.

[@10XL19]

Great information, now what if my full time job (w-2 income) is greater than my side hustle I.e. Amazon Flex and they pay me through a 1099 form estimated to make 30k this year, would it be more beneficial to open an LLC or be a sole Proprietor?

[@truejackson365]

This the one I need the answer to

[@AshyoDaddy]

Thanks!!

[@STOLerant]

What if I have a sole prop that has little to no income (starting), how are taxes handled there?

[@Adam-by6zp]

Thanks

[@Emiratechase]

I've got a nonprofit organization but I'm an sole proprietor

[@zumbadiva33]

Or do I pay myself out of the business income?

[@TREEZNBREEZE]

Also taxes are voluntary.Look it up!!

[@Mindfulcatalyst_yt]

Where can I get a business account? my personal bank asked for an outrageous starting deposit

[@LYFEAccounting]

Check out our video on the best business checking accounts.

[@missnurseeri]

I have Novo. And so far it's been great.

[@ronety6196]

That was beautiful Thank you Black King. That cleared a lot up! Tell Next Time

[@BradleyStutzman]

Yooo, sole proprietor here.

[@LifeIsMyTeacher]

Ok if I have a full time job and I’ve started my sole proprietorship on the side, will I have to pay the 15.3% tax on my ft job income if my business doesn’t make any money? Thanks for this video!

[@Timothy--vb7rr]

Good Question

[@nortonhvacr1401]

I started my own HVAC business last year as a sole proprietor. No employees just me. I’m struggling with understanding this and want to do things right. If anyone can offer guidance please reach out

[@Mindfulcatalyst_yt]

I work as a sole proprietor from my parents home so I have zero expenses.....so I’m pretty sure the tax bill for me is gonna be very large

[@LYFEAccounting]

You don't have any business expenses?

[@dizzydoesitall]

Hey, thanks for the info. I just started my sole pro LLC, if im paying myself through payroll (using quickbooks) do i still have to pay quarterly tax even though it says its tax is being taken out every paycheck? Thank you

[@DavidAlan.Parsons-z8r]

ICan I file on my socal security money every year relationship with the miner account trust name I've been told that I can get $250.000 back from the IRS and federal reserve attorney General in my state is that true and what do I need for form's to do this

[@genjioto]

Can you pay yourself by check, and reinvest what you see fit into the business?