For recordkeeping and taxes, you must distinguish between “your Coeur d’Alene business” income and “non-business” income. Business income is what you earn from selling a product or providing a service. Only your business income is included on your income records. Non-business income is reported, and taxes paid on it, but it is kept separate from your business income.
The differentiation between business and non-business income is not just academic accounting talk. Although business and non-business income are both subject to income tax, business income is also subject to self-employment tax (covered in the taxes chapter). Non-business income escapes self-employment tax.
“Gross receipts” is your total Idaho business income before any expenses. “Net income” is the income after expenses have been deducted. The income discussed in this chapter is the total income (the gross receipts).
Idaho Rental income: Rental income is considered Idaho business income only if you are in the rental business in Idaho. All other rental income is non-business income.
Interest income: Interest received on loans is not Idaho business income unless you are in the business of lending money. Interest received on accounts receivable (interest charges added to money your customers owe you) is business income.
Barter: If you barter or trade goods or services, you include the fair market value of what you receive as part of your business income.
Deposits and advances: If you take deposits or advances from your customers, they are considered income if they are not returnable. Returnable deposits and advances are not recorded as income.
Your own money, investments, and loans: Any of your own money put into the Idaho business, any money others invest in your Idaho business, and any loans received are not income to your Idaho business. You pay no taxes on this money. Do not include these amounts as part of your income.
Credit cards, debit cards, and electronic deposits: Merchants who accept credit and debit cards or electronic payments such as PayPal handle the transactions the same way as cash transactions.
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