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Sole Proprietor changed to Corporation

Laura SquiresLaura Squires Member Posts: 2

I just filed to change ourelectrical/handyman business to a corporation because it was recommended to protect our assets. It's just my husband and myself. We may have employees in the future.

I just need some advise and accounting help. How and what do we pay ourselves? How do I separate my personal and business finances?

in Accounting Technical Support

Comments

  • RTFinancialRTFinancial Member Posts: 4

    Hello Laura,

    It was a wise move to move from a Sole Prop to a Corporation. I am going on the assumption that you are based in the USA.

    The best way to separate business and personal finances is to have separate bank, loan and credit card accounts. Use the personal accounts only for personal expenses and the business accounts only for business expenses. If you need to put money into the business from your personal account, transfer the money from one account to another and use the business account for the business expenses. This will keep it nice, clean and separate for you.

    Paying yourself is different depending on if you are set up as a C-Corporation, S-Corporation, an LLC taxed as a corporation, or an LLC taxed as a sole prop/partnership.

    If you would like to discuss further, please review my website at www.RemingtonTrolliFinancial.com and reach out if you feel we would be a good fit.

    Thank you!

    Remington Trolli

    Rem@RemingtonTrolliFinancial.com

    215-359-5714

  • magicwillmagicwill Member Posts: 37 ✭✭

    Hi Laura,

    Congratulations on the transition. An important thing to realize is that the sole proprietorship and the corporation are separate taxpayers. The assets and liabilities of the former must be transferred to the latter, with the net recorded on the corporation's books as a balance sheet item.

    I have extensive experience in this and a range of other issues you're going to encounter. I've assisted other Wave clients in this process and can do the same for you and your husband. You'll need to create a new Wave business... described as the appropriate corporation type... and then begin structuring your chart of accounts.

    Getting the payroll piece will be essential, particularly as the IRS is focusing on pass through entities and the proposed reduction in the tax rate for these types of entities.

    My e-mail is willsaddler48@yahoo.com. I look forward to hearing from you.

  • KimptonKimpton Member Posts: 78 ✭✭

    And if you are in Canada Laura, I can help set you up as a corporation in Canada. My email is kimptonb@telus.net.

  • TaxLabTaxLab Member Posts: 22

    @Laura Squires any relation to David Squires?

  • CFO_HireCFO_Hire Member Posts: 8

    Hi Laura

    Great move!

    I am based in South Africa - Cape Town.
    I work remotely and can assist.
    As a Qualified Accountant, I can provide advise and perform the actual duties all outsourced.

    Thank you: asad@cfohire.co.za

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