I am starting a small business and I have a question regarding recordkeeping. I have a personal checking account, which I rarely use. I also have a joint account with my husband. We use this for all of our bills. My husband will not use the method you describe in your book, SELF-EMPLOYED TAX SOLUTIONS ,of creating an audit trail. He refuses to deposit his entire paycheck and write a check to himself for cash. And most of "our" joint money will be helping me get on my feet. How do I handle this?
Hmmmmm, Amy. I think this is more a marital relations question rather than a tax question, but I'll try. You said your husband "refuses, " so here are some questions to ask your husband:
- If his boss told him to punch a time-card at work because it made for easier business recordkeeping, would he refuse?
- In case of an audit, will he spend his days or weeks dealing with the IRS folks explaining the inflow and outflow of your household money? Or would he expect you to take on this task?
- If the audit result were bad, does he not mind putting extra dollars in the government coffers rather than having done it the correct, easy, audit-trail way in the first place?
- Is he not open about other family financial transactions?
- Is he supportive of you and your business?
- Does he take your new indie venture seriously? Or does he look at it as something to occupy your time?
What about this:[I'll make up some #s because I have none from you to work with.] Let's say he gets a $1,000 paycheck and keeps $200 out for spending money. Is there anyway that you could be a week ahead of him [maybe borrow the $200 from someone, if you don't have it]?
I wish you much success in you new venture!