Sole Proprietorships
A sole proprietorship reports its income and expenses on the owner’s personal 1040 tax return on the Schedule C. The owner is then taxed only on the net income from the business after all qualifying expenses are considered. The benefit of working with a tax professional is that we will notify you if there are common expenses in your type of industry that you should be deducting and aren’t. We don’t let you pay more in taxes than you are legally required!
Most businesses, especially those that could be considered “side hustles,” are started as a sole proprietorship. As a business grows, the owner often considers updating the entity structure to an LLC or corporation for various tax and legal advantages. Manada Tax Service has helped many clients through this transition and can help guide you as well.