In simple terms, a sole proprietorship refers to a business which is not incorporated and which has only one owner.
I’m encountering more and more sole proprietors who want to form S-corps so they can save on taxes. It’s a good strategy — if you know what you’re getting into. The problem I encounter with these clients is: almost all of them engage in mystical thinking about the wonders of S-corps.
This series on choosing a business entity started last June and covered 10 parts. Here’s a listing, with links, of all the parts in this series.
There’s no magical checklist for deciding on a business entity. But here are a few considerations.
In tax terminology, the term “draw” refers to money taken out of a sole proprietorship by the proprietor, or out of a partnership by a partner.
Does a Sole Proprietorship Need a Balance Sheet?
A discussion of the sole proprietor business entity.
Some basic tax information about sole proprietorships
Basic tax information about sole proprietorships
NOTE: I wrote this post in 2014, so be aware of its age. —– When I talk about the topic of salaries in sole proprietorships, I typically get confused looks from people. They run a sole proprietorship, they take money out of the business to live on or to reward themselves … that’s a salary, […]