Not sure

[trav2001]

Ok, so I'm new to the independent contractor world and small business world. I own a pool cleaning company in AZ and we are set up as an LLC. That business part of things I have a pretty good handle on now. But my question is this, I do some independent contracting work for a friends company. When he was processing my 1099 a couple of weeks ago he asked if I wanted it go thru my EIN or my SSN. I didn't know I could have it filed thru my EIN. If that's the case, do I just have the paychecks from him sent directly to my business account? That then becomes part of the businesses revenue, subtract my expenses and such, set aside taxes and THEN see what I have left over to pay myself? Or is worth doing it that way? This is all SOOOO new me I feel like I'm in over my head.

[turboguy]

It is probably really not that big a deal either way so don't worry about it. The cleanest thing would be to have him send the 1099 in the name of the LLC and to make the checks payable to the LLC as well. The advantage to doing it this way is that it would lump everything together and save some book keeping. It would be legal and acceptable to do it either way.

[trav2001]

Oh ok. That would def save me a lot of time and worry if I'm doing everything right or not. I use QBO (QuickBooks Online) for my accounting. Can I just add my personal accoount to the business section of that as well so that the expenses are better organized?

He pays me every Friday thru Chase Quick Pay and it just goes to my personal account. I don't think it'd be any big deal for me to switch the account it went into. I'm sure I'm over thinking a lot of this. I just don't want to have to pay back taxes or not with hold enough for taxes. Still being so new to this small business thing and learning all of this is a lot! :/

[Business Attorney]

If your LLC is a single member LLC and you have NOT elected to have it treated as an S corporation for tax purposes, then the LLC is a single member LLC and it is basically irrelevant from a tax standpoint whether he uses your SSN or the LLC's EIN. It all ends up on your own Form 1040.

If your contracting with your friend's company is in the same line of business, pool cleaning, it probably makes sense to run everything through the LLC's accounting records to get a better picture of your business operations.

If your LLC is being treated as an S corporation, the issue is a little more complicated because you would be moving the contracting income from your Schedule C to the LLC's Form 1120-S and a Schedule K-1. It doesn't necessarily change the end result in terms of the taxes you pay, but it certainly changes the process. If that is the case, you might want to talk to an accountant before you make the change.

[trav2001]

If your LLC is a single member LLC and you have NOT elected to have it treated as an S corporation for tax purposes, then the LLC is a single member LLC and it is basically irrelevant from a tax standpoint whether he uses your SSN or the LLC's EIN. It all ends up on your own Form 1040.

If your contracting with your friend's company is in the same line of business, pool cleaning, it probably makes sense to run everything through the LLC's accounting records to get a better picture of your business operations.

If your LLC is being treated as an S corporation, the issue is a little more complicated because you would be moving the contracting income from your Schedule C to the LLC's Form 1120-S and a Schedule K-1. It doesn't necessarily change the end result in terms of the taxes you pay, but it certainly changes the process. If that is the case, you might want to talk to an accountant before you make the change.

That makes sense. We're not set up for S-Corp so should be good there. And it's just me, so single member LLC. That would def make things so much easier. Now here's another question: I use my personal truck for work and personal use. I pay my monthly vehicle insurance from my personal account. Is that counted as a monthly expense if I would have the earnings going thru the company? I was counting it as an expense since I was having those payments go thru my SSN.

[turboguy]

You need to keep a log of your business miles. You can then either deduct the standard mileage rate for the business miles or the percent of the expenses the truck was used for business. If you use the standard mileage rate the government announces what that is each year. For 2017 it is 53.5 cents per mile.

[trav2001]

You need to keep a log of your business miles. You can then either deduct the standard mileage rate for the business miles or the percent of the expenses the truck was used for business. If you use the standard mileage rate the government announces what that is each year. For 2017 it is 53.5 cents per mile.

This part I already know about. But that's not what I asked.

[turboguy]

Sorry, you can deduct the cost of the insurance the same percentage that the truck is used for business. In other words if the truck is used 50% of the time for business you can deduct 50% of the cost of insurance. If you take the standard mileage you can't deduct the insurance.