Setting Up Sole Proprietorship Books

[Mike or Penny Novack]

>Does anyone have any advice for setting up sole proprietorship books?
>
>In the US, sole proprietorships are taxed as the person who owns the
>business - one records income and loss on one's personal 1040 Schedule
>C.
>
>One can have a separate Employer Identification Number, but my
>understanding is that if one doesn't have any employees, one can just
>use one's own Social Security Number.  That's what I've always done,
>and the IRS has never complained.
>
>Should I have just one GnuCash file for both my business and myself
>personally, or should I have separate files for each?  If I have
>separate files, does GnuCash support having multiple files open
>simultaneously?
>
>I did some Google and list archive searches, but didn't find much insight.
>
>I don't expect the proprietorship to ever have any employees.
>
>I put money into the business, as well as do Owner Draws fairly
>frequently.  That's why I'd want both files open at once.....
>
Again -- this isn't really a GnuCash question and I am not qualified to 
give professional advice. So let me do this by asking you some questions 
and you will probably see that you already know the answers.

While you and the business file taxes together you don't do that on the 
same part of the 1040, right? You need figures for the business to fill 
out the schedule C and whether the business made or lost money a 
separate question whether you had income or not (other lines on the 1040 
than where the grand total from the Schedule C goes). Would that be 
easier or harder with one set of books or two? Yes you can do selective 
reports but isn't that work setting up which accounts to include/exclude 
(if using a single set of books). Wouldn't it be straightforward with 
two sets of books?

You say fairly frequent draws and "investments"? (negative draws)  
Define fairly frequent? You do that daily? Or is it the case that in 
fact these transactions represent just a very tiny fraction of all 
transactions either for yourself or for the business? In other words, 
would it really be that hard to enter in two sets of books draws/puts 
that are weekly, monthly, or whatever?

You searched Google, etc.? Is that where you expect to find things like 
the entire text of books with a title like "Accounting for the Sole 
Proprietorship"? If you plan on doing your own accounting instead of 
paying an accountant to do that for you, isn't that the sort of material 
you would want to learn?

Michael D Novack, FLMI