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Do I have to pay personal income taxes if money is made out to my business?

Asked by: MarkMares 171 views , , ,

If I get a business License and business tax ID number and have the companies make the checks out to the company instead of my name. Then not pull any money out to pay myself until 2nd quarter or 3rd quarter of 2010 to myself. Do I personally have to claim the money on personal taxes for 2009? I only worked for three weeks on my independent contractor basis in 2009 and don’t want to claim it if I don’t have to. I also opened a business bank account so it won’t appear in my personal account.

3 Answers



  • +1 Votes Thumb up 1 Thumb down 0

    Pinyo on Jun 01, 2010

    Hi Mark, I am not a tax pro, but I think the answer depends on your business structure. If your business is a sole proprietor or a partnership, I believe you have to pay personal income taxes in 2009 even if the checks are made out to your business ad you don’t withdraw from the account until 2010. However, if the business is a corporation or an LLC, the income would not be tied to your personal income. You don’t have to pay taxes on the amount, but your business will have to pay taxes for 2009.

    Either way, there’s no way to avoid paying income taxes on income you receive this year.



  • +1 Votes Thumb up 1 Thumb down 0

    mbhunter on Jun 01, 2010

    I’m not sure Pinyo is 100% correct here.

    General partnerships, limited partnerships, and limited liability companies are pass-through entities.  This means that any profit or loss passes through to the partners, member managers, etc.  In essence, you record the portion of the income (loss) attributable to you on your personal income tax.

    It’s only when you get into the realm of corporations that they behave as their own tax entity.



  • +1 Votes Thumb up 1 Thumb down 0

    Pinyo on Jun 01, 2010

    Oops, mbhunter is right, LLC should not be listed there.

    “The profits or losses of the business pass directly through to the owners’ personal income tax returns, on their Form 1040. The LLC files a Form 1065, and then lists each member’s taxable profit on Form K-1. In other words, the LLC itself does not file taxes.”

    Source: Gaebler


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