Thinking of starting a new business? The type of company you found can have a significant effect on your tax obligation in the coming years.
Of the most common business entities—including partnerships, LLCs and corporations—sole proprietorships are widely considered the simplest type. A sole proprietorship refers to an unincorporated business owned and operated by a single person or, in some cases, a married couple. Because all of your business’ revenues are considered personal income, filing taxes as a sole proprietor is relatively simple, but this doesn’t mean it’s without its drawbacks.
Let’s take a look at what a sole proprietorship taxes look like and find out how you can minimize your tax burden in the coming years.