sole-proprietorshipsIf you alone have opened up a new business and are unincorporated, then according to the IRS, you are a sole-proprietor. This type of business has no legal existence apart from its owner. It is the simplest form of business to start and maintain. As you grow, you'll need the advice of your My Way CPA to determine when the simplicity of a sole-proprietorship is outweighed by the risks of liabilities that reside with the owner. For example, if you are doing work for a company on the side and are not an employee, then you would be a sole-proprietor by default. Since income tax is not withheld from your pay, you will often have to make estimated tax payments. Individuals who neglect to do this can be surprised at tax time with a large tax bill, plus penalties and interest. We can help you minimize or avoid this by setting up estimated payments for the next year.
Often small business owners make the mistake of incorporating too soon. There are many benefits to remaining a sole proprietor - timing can be a huge factor.
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