managing multiple sources of income for consulting and other work

May 12, 2014 12:29 PM

I have a fledgling sole member LLC with its own tax ID and would like to charge consulting and software sales through that, but I have other income as well.

I have some small investments I made in my own name which I might liquidate this year.
I also have some gigs in tutoring and teaching whose income I would not put on the LLC.
The teaching gig has some taxes subtracted from it already so it would probably not factor into the quarterly tax estimates.
Yes, I do plan to hire an accountant, but I don't want to pay an arm and a leg for them doing two sets of taxes until I start making more money through the LLC.
I'd like tips and examples of how to manage this keeping good records for taxes and staying on top of the financial streams, on paying yourself from the LLC and how to keep records of that, and so on. I want to cover all my bases. I have been using Quickbooks online but I don't think it can handle multiple entities, so maybe some software suggestions would be good too.
Thanks!

posted by spacefire to Work & Money (1 answer total)

If you're a single-member LLC, and haven't filed for S-incorporation and aren't paying yourself a salary through it yet, it's just another schedule C for your regular tax return, taking cash out is just an equity withdrawal and has no tax effect. On the other hand, you're going to be having self-employment tax on all its income. Once you do the S-corp, you'll have to run it through all the proper payroll channels and that will get more complicated and you should definitely not do that without an accountant unless you are positive you know what you're doing. This is the sort of thing you really need the accountant for, how to make decisions to reduce your tax exposure, not just to fill our your income tax forms.

But, no, you shouldn't put transactions for things that aren't for the LLC in your Quickbooks. Just keep a spreadsheet or something, keep copies of your paperwork for all business transactions regardless of which business, keep copies of paperwork for sales of investments, basically keep your paperwork generally.
posted by Sequence at 12:49 PM on May 12, 2014 [1 favorite]