Sole Proprietorship

Of the four business entity types, the sole proprietorship is by far the most flexible and easiest to manage.  The sole proprietorship has 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)

Charitable Giving

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 writing the check. Therefore the bookkeeper must still track the deduction and identify the donation properly so the gift is deductible on the owner’s personal tax return.

Forms of Business Ownership

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 control?’ 

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.

The Sole Proprietorship – The Basics

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.

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

Self-Employment Tax

Simply put, this is a tax on your net earnings from your small business operation.  If you are unincorporated, you have to pay this tax.  This includes those in partnership arrangements, and in any form of Limited Liability Company status.  So why don’t corporations pay the tax?  Actually they do, it’s just called a different name. 

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