Need_info wrote:Great. Thanks for the address info.
Now for the payments I receive, do I open a separate account? Cheque/cash? When do I start worrying about taxes?
I know I might be getting ahead of myself worrying about taxes when I haven't earned a cent yet, but I want to cover all aspects and not get stuck later.
Tx.
You need to open separate accounts for your SP to properly manage it. The problem is one of intermingling of funds. This is often the biggest place that SP's get into trouble... it's not clear what is personal and what is business related when your clients write a check to 'John Doe' instead of 'John the Storyteller'. How do you explain to the IRAS that a check you received as 'John Doe' was for an old appliance you sold off, and not payment received for telling a story?
When you have separate accounts, it makes it easy for you to prove your income and expenses for your business, and that you have not been running personal expenses through your business, although I expect this happens quite often, nonetheless. Note that as a SP, the net income of your business goes directly to your personal income tax form, that is, while you need to report your business activities there is no taxation of the business, unlike a company. Thus, you "worry" about taxes as you would as an individual tax payer.
In terms of payment types, it really doesn't matter, with the following caveats. Cash payments always raise suspicion because the can be under reported and they are hard to trace. If you intend to take cash you should consider sequentially hard numbered invoices/receipts that provide something of an audit trail.
Checks are easy... but you need to make sure that the check is good... and you will run into bad checks... can be hard to collect.
For a small percentage you can hook up with one of several providers that will supply you a credit card reader and an app for your iPhone, iPad, or Android device that will let you scan a credit card on the spot, and complete the transaction via your phone's data plan. The service then transfers the funds to your bank account. Easy peasy but you will pay a couple of percentage points at least.
In general, you need to keep an adequate paper trail, even if on a computer, to show that you have properly reported all income, and that all expense claims are legitimate and allowed by law.
, I got frustrated and decided to go in person to MOM on Havelock Rd. 