Question for the Money Doctors
Question submitted on May 9, 2020.
I am a self employed sole proprietor carpenter/general contractor in california. I have been shut down due to the covid shelter in place orders.
I am wondering how to handle my $1,000 SBA EIDL grant that I got, as well as my $1200 stimulus check, and my unemployment income I am starting to receive.
Do I deposit this money into my business bank account or my personal bank account?
Will EDD money be considered business income that will have to be accounted for in my business Quickbooks and considered business income? Or is it separate and considered personal income?
I just got my EDD debit card in the mail and wanted to switch it over to deposit straight into my bank account, but I didn't know which account to send it to-business or personal. Which also brought me to wonder about the other funds such as SBA loan and $1200 stimulus check and how to handle those.
The $1,000 SBA EIDL is a tax free grant. You will not need to repay it.
The $1,200 stimulus check is also tax free. It is not considered to be income.
The EDD money will be taxable for federal purposes, but not taxable for state purposes. You can elect to have 10% federal withholding on these payments, otherwise you will have a tax bill next year.
These are all personal payments so you should put the money in your personal bank account. This is not business income.
Hope you get back to work soon. Construction is now allowed. Be safe!
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