Sole Proprietorship What is a sole proprietorship? A sole proprietorship is a pass-through entity for a business with only one owner. Generally, contractors and freelancers choose to operate as a sole proprietorship due to its low setup costs. How is a sole proprietorship taxed? The business entity itself is not taxed; all profits and losses
Are you thinking about starting a company or changing your business structure? If that’s the case, you’ll need to decide whether a C corporation or a pass-through entity (sole proprietorship, partnership, limited liability company (LLC), or S corporation) is ideal for you. There are several factors to evaluate when choosing an entity type, and potential
The right entity choice can make a difference in the tax bill you owe for your business. There are plenty of potentially expensive tax problems that you should assess before making the decision to convert from a C corporation to an S corporation.
The Tax Cuts and Jobs Act (TCJA) has changed the landscape for business taxpayers. That’s because the law introduced a flat 21% federal income tax rate for C corporations. Under prior law, profitable C corporations paid up to 35%.
For decades, business owners debated the merits of switching from a C corp to an S corp, mainly for the tax advantages offered by an S corp to its owners. With the new tax act in place, the debate has flipped, and S corp owners are wondering if changing to a C corp might be advantageous.