Tag Archive for Sole Proprietorship

Sole Proprietorship – Is The Risk Worth It?

Barry Fowler7

If you are considering starting a business, the simplest and least expensive form of business is a sole proprietorship. A sole proprietorship is a one-person business that reports its income directly on the individual’s personal tax return (Form 1040) using a Schedule C. There is no need to file a separate tax return as is required by a partnership or corporation (if the business is set up as an LLC with just one member, filing is still done on Schedule C, although an LLC return may also be required by the state). Generally, there are very few bureaucratic hoops to jump through to get started.

However, we strongly recommend that you open a checking account that is used solely for depositing business income and paying business expenses. You will also need to check and see if there is a need to register for a local government business license and permit Read more

Offbeat Questions Are The “Spices of Life” Regarding Simplified Employee Pension (SEP)

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Can You Establish a SEP Plan if you are a Sole Proprietor? What if that Sole Proprietorship Had Historically Passive Income?

Regardless of their nature or topic matter, offbeat questions are one of the spices of life. When it comes to the realm of taxation generally speaking the answers frequently distill down to – it depends.

These two questions were asked of me on my last trip to New York City and I couldn’t restrain a spontaneous sarcastic guffaw as we were in the middle of the Museum of Modern Art attempting to comprehend the Matisse Cut-Out Exhibit and I was day dreaming that my 10 year old daughter may perhaps be an artistic genius. Read more

S Corp vs. LLC – Simple As Choosing Salt Or Pepper?

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Someone said, “The 3 C’s of life were: CHOICES, CHANCES and CHANGES. One must make a choice to take a chance or one’s life will never change”. We are faced with choice in every thing we do, and making the right choices requires sound knowledge of the various options available to us.

When choosing an operating entity for a company, it is very important that we thoroughly research the options available. Your business can be a sole proprietorship, a partnership with someone else, a single member LLC, a pass-through entity like an S Corporation or it can be a C corporation. What I will layout in this blog today are the characteristics of an Limited Liability Company and an S Corporation; the pros and cons of choosing each entity type; and converting from one entity to another. Read more