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Payments and Wages help!
Skism
Member Posts: 4
Hi, I've been using wave for a side hustle that ive had for a few years now, I have recently made the move to be self employed and that side hustle has become my main gig. I have started to invoice someone for some subcontract work, my question is that when I receive the monies for the invoice what income category do I put it under?
Is it simply Invoice Payment or do I create a wages income category?
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Next question is,
I then transfer some of that money into another bank account that I have, (which is not linked to wave) What category do I put this transfer under?
Skism,
If you are filing as a sole proprietor or single member LLC then the invoice payments are sales and any payments you make to yourself (either transfer to personal or check) are classified as an owner draw. You cannot pay yourself a W-2 salary. Be sure to stay on top of taxes you may owe. Many of my clients forget that the transfers they make and spend are all pre tax dollars which is different then when you were receiving a paycheck from your employer. That was net of taxes.
Mike G, CPA
www.mgfinancial.net
Mike,
Thank you for your timely reply, appreciate it!