Sole Proprietorship

Of the four business entity types, the sole proprietorship is by far the most flexible and easiest to manage. There are very few drawbacks. In the world of business, the key is to maximize profit with the least amount of risk. Each of these two elements is addressed as it relates to 1) decision making, 2) paperwork, 3) taxation and 4) civil matters.

Bookkeeping – Charitable Giving (Lesson 64)

non profit work

Many small business owners are actively involved in the community and thus donate time and money to their favorite cause.   In almost every case the owner believes the donation is a business deduction.     It is NOT a business deduction for tax purposes except under the C-Corporation status; however, the business is still...

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Forms of Business Ownership

When an entrepreneur starts out on his long journey of building a legacy with his business; he almost immediately focuses on the legal status of his business.   His thoughts include:  ‘Should I become a limited liability company or an S-Corporation?’;   ‘What if I take on partners?’; ‘How do I get more capital without giving up...

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Business Trusts

Business Trusts

The common law definition of a business is an investment of capital or property by individuals which creates the means to carry on towards the goal of generating a profit.   Every state recognizes different legal formats to conduct business.   The simplest and most common is the sole proprietorship .   Other forms include partnerships, limited liability company and of course corporation status (S-Corporation is a federal tax option of a corporation).   However, two states actually recognize another legal format - business trusts.

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How is a Sole Proprietorship Taxed? Understanding Schedule C

The sole proprietorship is taxed at the individual tax level. Basically, the income earned during the calendar year is calculated on Schedule C of Form 1040. The final number is transferred to the front page of Form 1040 to line 12. Schedule C is divided into three major sections. Below is an explanation of each...

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The Sole Proprietorship – The Basics

Of the four business entity types, the sole proprietorship is by far the most flexible and easiest to manage.  There are very few drawbacks.  In the world of business, the key is to maximize profit with the least amount of risk.  Each of these two elements is addressed as it relates to 1) decision making,...

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Self-Employment Tax: You Can Stop Staring At Me Now!

I was in the attic once hunting down a noise, of course it was at night and I don’t have any lights in the attic to assist me.  So, I grabbed my son’s Boy Scout Flashlight that mounts on your forehead and headed up to find a raccoon staring at me.  Of course once that...

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Types of Business Entities – Sole Proprietorship, Partnership, Corporation & Limited Liability Company

When an entrepreneur starts a new business operation, one of the first questions (s)he deals with is the form of business existence. There are a multitude of entities that the law allows. This article describes the four main types and the decision making model that an entrepreneur should follow in determining the best for the...

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