Entrepreneurial income and expenses: procedure for determination and accounting

Small and medium-sized companies in Russia are an integral part of the economy. Domestic entrepreneurs are actively exploring new market niches and successfully scaling existing businesses. It is clear that organizing and running your own business involves taking into account many features and subtleties in the management of the company, a key position among them is occupied by accounting for income and expenses.

Production costs

Evgeniy spent a lot of money to open his small dumpling production. He calculated how many thousands of rubles had already been invested:

• 20,000 – rent of premises. Light and spacious - can't compare to a small kitchen.
• 80,000 - equipment. I had to buy an industrial refrigerator and a strong meat grinder.
• 20,000 - inventory. For good dumplings you need rolling pins, cutting boards and other utensils.
• 50,000 - purchase of raw materials. Delicious meat is expensive, but Evgeniy does not skimp on quality raw materials.
• 80,000 - salary. It is received by Evgeniy’s accountant and assistant.

Total expenses are 250,000 rubles. In the first month, the company earned 200,000 rubles. If Evgeniy calculates profit taking into account all expenses, the result will upset him:

200,000 – 250,000 = -50,000 rubles

Is our hero working at a loss? Maybe next month will be more profitable?

The point is how to calculate expenses. Equipment does not pay for itself immediately. To avoid confusion, the company's expenses should be divided into operating and investment.

Operating expenses are the money that goes into the production and sales process: renting premises, purchasing raw materials and consumables, paying salaries.

Investment costs are the costs of something that will last a long time in production.
In our case, this is a refrigerator, a meat grinder and kitchen utensils.

Individual entrepreneur income

“How much do you earn?” is not an idle question. A lot depends on the amount of income received: both the size of deductions and the possibility of applying a tax regime with attractive conditions.

The income of an entrepreneur is recognized as all cash receipts from the sale of goods, provision of services, performance of work, as well as the gratuitous receipt of property. The income of individual entrepreneurs is formed by the following items:

1. Payment for performing work or providing a service.
2. Profit received from turnover.
3. Sale of assets, securities or property of individual entrepreneurs, confirmed by documents of ownership.
4. Non-operating profit.

Personal income is the basis for calculating taxes from an entrepreneur. The procedure for determining it depends on the chosen taxation regime.

Table: amount of tax payments depending on the tax regime

The applied tax regime determines the maximum possible income and options for confirming it. For example, for the basic (OSNO) and simplified regimes (STS), as well as for the regime of payment of agricultural tax (UST), cash receipts are actual and without restrictions on the maximum value. For the patent regime (PSN), the possible income is set, and for the imputed income regime (UTII), its maximum value is determined.

Often, different modes are used for different areas of business, for example, along with OSNO, UTII and PSN are used, then the amount of imputed and possible income is added to the total income.

The amount of net income remaining at the disposal of the entrepreneur depends on the chosen tax payment system.

Can the personal funds contributed by an individual entrepreneur be considered income?

Income is what a businessman receives from his activities, an economic benefit that is expressed in cash or in kind. Depositing personal funds is not considered income, so this transaction is not subject to taxes.

Maximum income of an individual entrepreneur

The simplified tax system, unified agricultural tax, PSN, UTII can be applied subject to clear conditions: the number of personnel in the company, the maximum amount of income received, a certain list of types of activities.

The patent regime has an upper limit on business income. Receiving income in an amount of more than 1 million rubles (the law of the subject may establish another limit on the amount of income - up to 10 million rubles) deprives the individual entrepreneur of the right to apply the patent regime for paying taxes. Then the entrepreneur can switch to the simplified or basic mode.

The opportunity to choose appeared in 2021; before that, excess automatically meant a transition to OSNO.

The income limit for the simplified regime is set at 112.5 million rubles based on the results of nine months of the year in which the organization submits a notice of transition (346.12 of the Tax Code of the Russian Federation).

Maintaining a convenient special taxation regime in a multi-industry company will be facilitated by separate accounting of income and expenses for each area. Thanks to it, income in business areas will remain within the specified limits.

Also related to the maximum income of an individual entrepreneur are contributions to the Pension Fund of the Russian Federation, as well as to the Social Insurance Fund. For those whose income does not exceed 300 thousand rubles per year, the total amount of payments (for 2018) is 32,385 rubles:

• Pension insurance - 26,545 rubles.
• Medical insurance 5,840 rubles.

If you managed to earn more than 300 thousand rubles, then in addition to 32,385 rubles you will pay 1% on income above the established amount.

Please note that the amount of insurance premiums will increase from year to year. So, in 2021, entrepreneurs will have to pay 36,238 rubles. (29,354 + 6,884), and in 2021 - 40,874 (32,448 + 8,426). These numbers are expressly stated in Art. 430 Tax Code of the Russian Federation.

Income received and expenses incurred are reflected in the Individual Entrepreneur’s Income and Expense Accounting Book

Documents confirming income of individual entrepreneurs

Quite often, individual entrepreneurs have to confirm their income. When reporting to the state, a businessman shows his income in the tax return. A tax return with a visa from the regulatory authorities is an official confirmation of the income of individual entrepreneurs using the OSNO, simplified tax system, and unified agricultural tax.

An entrepreneur paying taxes in the UTII or PSN regime takes the imputed or possible income, respectively, as the basis for calculating taxes. In reality, revenue is different from the income on which tax deductions are calculated. Therefore, some businessmen do not understand what income is, and most importantly, how an individual entrepreneur should be confirmed on UTII or PSN.

As documentary evidence of income, entrepreneurs on the PSN can present:

• a patent, confirming possible income;
• an income ledger that records the income actually received.

An individual entrepreneur who uses EBIT enters into the declaration the income calculated for the type of activity. Thus, it does not reflect the actual income of a self-employed citizen. It is not necessary to keep a book of financial transactions for this mode. This means that supporting documents for businessmen applying the single imputed tax regime are primary documents or the Book of Accounting for Financial Transactions.

But often an entrepreneur needs just a certificate of income, because presenting one document to different companies is very convenient. However, the question arises: how can a businessman compose it and who should validate it? The form and procedure for issuing such a certificate have not yet been determined by regulatory documents. But the issue can be resolved by drawing up such a paper and signing it with your own hand. Try to get a similar certificate from the tax office that accepts individual entrepreneurs’ reports.

To obtain a certified income certificate, an individual entrepreneur on UTII or PSN will have to be smart

Gross revenue

Gross revenue will show whether all expenses incurred in the past period were recouped. To do this, you need to subtract operating expenses and depreciation from the company's revenue.

Evgeniy counted the money taking into account his new knowledge and was delighted:

200,000 – (150,000 + 100,000: 36) = 47,200 rubles

Almost 50,000 rubles! You can buy another refrigerator and cook around the clock to flood the shelves of all stores with delicious dumplings. You just need to remember about your obligations and make sure that the business can handle the expansion.

Withdraw cash - with caution

It's all about financial monitoring. This is a division of the bank that monitors suspicious transactions. Banks are required to monitor transfers and receipts due to Federal Law N 115-FZ. Financial monitoring is needed to combat money laundering and the financing of prohibited organizations.

The bank may request acts, contracts, invoices and invoices to verify the reality of the transaction. Documents must be provided within a few days. If you ignore the request, the bank will block the account. Then the money can only be withdrawn to the individual entrepreneur’s account in another bank with a commission of 10 to 20%.

Here are simple tips on how to avoid being branded as a cashier:

If possible, do not withdraw cash , pay from the individual entrepreneur’s current account or transfer to a personal card. The less cash you withdraw, the less reason there is to suspect you of cashing out.

Don't cash out everything at once. If you receive 200 thousand from a client, don’t withdraw everything at once. If you really need cash, it is better to wait a few days and withdraw the required amount, but again not all at once.

Keep money in your account longer. The longer the money is in the account, the more the bank trusts you. This is also profitable because banks charge interest on the balance.

If you have employees, transfer salaries through a salary project rather than in cash. The more cash you withdraw, the more worried the bank becomes.

Never participate in dubious schemes.

Submit reports in three clicks

Elba - online accounting for individual entrepreneurs and LLCs. The service will prepare reports, calculate taxes and free up time for useful things.

Liabilities

You cannot spend gross proceeds while the individual entrepreneur owes money to someone. Evgeniy has not yet taken out shares or loans, but he will come in handy in the future.

Debt can be either accounts payable or accounts receivable. If Evgeniy accepts raw materials from the supplier and agrees to pay for them next month, he will have accounts payable. If Evgeniy fulfills the order and the contract contains a deferred payment clause, the debt will be a receivable.

In any case, you need to keep records of creditors and debtors - so as not to spend other people's money or remind the debtor about payment. When all the obligations are before your eyes, it will be clear how much revenue is left for the expansion of production or the whims of the entrepreneur.

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Net profit

So, the enterprise earned 200,000 rubles, operating expenses - 150,000 rubles, depreciation - 2,800 rubles, liabilities - 0 rubles, taxes - 7,080 rubles. We count:

200,000 – (150,000 + 2,800 + 7,080) = 40,120 rubles

This is net profit, which Eugene will dispose of at his own discretion. It can increase the range or production volumes, spend money on advertising, leave money in the company’s account or invest in some enterprise. But how to increase profits?

Scheme for choosing a tax system

The general plan for choosing a tax system is as follows:

1. Check whether the UTII and patent are suitable for your field of activity.
2. If UTII and patent are suitable, check the restrictions on these special regimes. For example, you cannot hire more than 100 people for UTII, and more than 15 for a patent.
3. If you cannot work on UTII and a patent, choose the simplified tax system. There are two options here: pay taxes on income or on income minus expenses. If expenses are more than 60% of income, it is better to work according to the “Income minus expenses” system. Simplification has its limitations.
4. If you work in agriculture, the Unified Agricultural Tax (UST) is suitable.
5. If none of this applies or you are going to work with companies that apply VAT, you will have to choose a general tax system.

And now more about each taxation system.

Where is the implementation reflected?

In what account is sales revenue reflected? Based on the Chart of Accounts and the Instructions for its application (Order of the Ministry of Finance dated October 31, 2000 No. 94n), the main account for accounting for the sale of goods is account 90 “Sales” . Revenue from the sale of goods, works or services is reflected in the credit of account 90.1 “Revenue” in correspondence with account 62.01.

We talked in more detail about which accounting accounts show revenue here.