Hi. My sister and I started a preschool last year from her our house. We used her bank account on invoice for school fees for ease of having money go into one account and she paid me a salary every month. Now this year I have kind of gone on my own but still under her school name(all school fees and expenses for my classroom will come to and from me respectively) this month I opened another bank account in my name (it's just a normal savings account) to keep school fees and school expenses.
So my question is can I pay myself a salary into my everyday bank account that I use for my personal expenses? Does being a sole proprietor allow you to do this? I'm trying to get my books in order. I wanted to apply for home loan but as a sole proprietor they ask you for auditored financial statements and 2 years bank statements and 12 months income forecast. Which is driving me insane.
As now to get all this I heard that audited financial statements can cost an arm and a leg. Now I would need someone to do my books for me instead of me doing it myself-which is an extra expense. The forecast is not a problem as this will be school fees due to me for the year. But he other stuff is such a headache.
Where as if I get paid a salary from an employer they wouldn't ask for all that documents - soooo another question...if I pay myself a salary does this not count as being employed?
I have money in my day to day account. They can see how long its been in there. I don't have any debt. I have a good credit score. They make it so complicated for self employed people.
I only have 10 kids in the classroom.
I don't have to register as a company /business as this is what the definition of sole proprietor is.
I feel like I'm on a fine line between self employed and being employed by my sister as we fall under one school name. Just any expenses (e.g. Snacks, cleaning supplies, puzzles, paint, etc) to run my class I pay for and the school fees for kids in my class come to me.
If anyone can offer advice if I'm doing this right I would really appreciate it.
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