Sole Proprietors – DougFreemanCPA.com

Key 2024 inflation-adjusted tax parameters for small businesses and their owners

Leave a Comment / Federal Taxes, Inflation, LLC, Ordinary Income Tax, Partnerships, Past-Through Entities, S Corporation, Self Employment Tax, Small Business, Small Business Owners, Small Business Tax Tips, Sole Proprietors / By Douglas Freeman

The IRS recently announced various inflation-adjusted federal income tax amounts. Here’s a rundown of the amounts that are most likely to affect small businesses and their owners. Rates and brackets. If you run your business as a sole proprietorship or pass-through business entity (LLC, partnership or S corporation), the business’s net ordinary income from operations …

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Choosing a business entity: Which way to go?

Leave a Comment / Alternate Minimum Tax (AMT), Business Entities, C Corporation, Federal Income Tax, Federal Taxes, LLC, Past-Through Entities, Qualified Business Income Deducton (QBI), S Corporation, Small Business, Small Business Owners, Small Business Tips, Sole Proprietors / By Douglas Freeman

If you’re planning to start a business or thinking about changing your business entity, you need to determine what will work best for you. Should you operate as a C corporation or a pass-through entity such as a sole proprietorship, partnership, limited liability company (LLC), or S corporation? There are many issues to consider. Currently, …

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Hiring family members can offer tax advantages (but be careful)

Employees, Employment Records, HRA, Small Business, Small Business Owners, Small Business Tax Tips, Sole Proprietors, Summer Employees / By Douglas Freeman

Summertime can mean hiring time for many types of businesses. With legions of working-age kids and college students out of school, and some spouses of business owners looking for part-time or seasonal work, companies may have a much deeper hiring pool to dive into this time of year. If you’re considering hiring your children or …

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Key tax issues in M&A transactions

Assets, Business Income Tax, Capital Gains, Federal Income Tax, LLC, Merger & Acquisition, Partnerships, S Corporation, Small Business, Small Business Tax Tips, Sole Proprietors, Stocks, Taxes 2023 / By Douglas Freeman

Merger and acquisition activity dropped dramatically last year due to rising interest rates and a slowing economy. The total value of M&A transactions in North America in 2022 was down 41.4% from 2021, according to S&P Global Market Intelligence. But some analysts expect 2023 to see increased M&A activity in certain industries. If you’re considering …

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Do you qualify for the QBI deduction? And can you do anything by year-end to help qualify?

Business Deductions, Qualified Business Income Deducton (QBI), Small Business, Sole Proprietors / By Douglas Freeman

If you own a business, you may wonder if you’re eligible to take the qualified business income (QBI) deduction. Sometimes this is referred to as the pass-through deduction or the Section 199A deduction. The QBI deduction is: Available to owners of sole proprietorships, single-member limited liability companies (LLCs), partnerships, and S corporations, as well as …

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You may be liable for “nanny tax” for all types of domestic workers

Domestic Workers, Federal Income Tax, Federal Unemployment (FUTA Tax, Form SS-4, Medicare Taxes, Nanny Tax, Social Security & Medicare (FICA) taxes, Sole Proprietors / By Douglas Freeman

You’ve probably heard of the “nanny tax.” But even if you don’t employ a nanny, it may apply to you. Hiring a house cleaner, gardener or other household employees (who isn’t an independent contractor) may make you liable for federal income and other taxes. You may also have state tax obligations. If you employ a …

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Self-employed? Build a nest egg with a solo 401(k) plan

401K, LLC, Self Employed, Simplified Employee Pension (SEP), Small Business, Small Business Owners, Sole Proprietors, Solo 401 (k) / By Douglas Freeman

Do you own a successful small business with no employees and want to set up a retirement plan? Or do you want to upgrade from a SIMPLE IRA or Simplified Employee Pension (SEP) plan? Consider a solo 401(k) if you have healthy self-employment income and want to contribute substantial amounts to a retirement nest egg. …

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Three tax breaks for small businesses

C Corporation, Cash Method of Accounting, Federal Income Tax, LLC, Past-Through Entities, Qualified Business Income Deducton (QBI), S Corporation, Section 179, Shareholder, Small Business, Sole Proprietors, Tax, Tax Deduction / By Douglas Freeman

Sometimes, bigger isn’t better: Your small- or medium-sized business may be eligible for some tax breaks that aren’t available to larger businesses. Here are some examples. 1. QBI deduction. For 2018 through 2025, the qualified business income (QBI) deduction is available to eligible individuals, trusts, and estates. But it’s not available to C corporations or …

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The tax obligations if your business closes its doors

C Corporation, Corporations, Federal Income Tax, Income Tax, Independent Contractors, Partnerships, Small Business, Small Business Owners, Sole Proprietors / By Douglas Freeman

Sadly, many businesses have been forced to shut down recently due to the pandemic and the economy. If this is your situation, we can assist you, including taking care of the various tax responsibilities that must be met. Of course, a business must file a final income tax return and some other related forms for …

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Important tax aspects of operating your business as a sole proprietor

Business Deductions, Business Expenses, Health Care Insurance, Home Office Deduction, Itemized Deduction, Past-Through Entities, Self Employment Tax, Small Business, Small Business Owners, Sole Proprietors / By Douglas Freeman

If you’re in business for yourself as a sole proprietor, or you’re planning to start a business, you need to know about the tax aspects of your venture. Here are eight important issues to consider: 1. You report income and expenses on Schedule C of Form 1040. The net income is taxable to you regardless …

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