Business Entity – Pros and Cons

Business Entity Pros and Cons Sole Proprietorship Pros • No formal creation process.• Easy to operate and dissolve.• No separate tax return.• Easy to integrate business use of home deductions.• No double taxation of profits. Cons • No liability protection, except through insurance.• Self-employment tax is assessed on entire profit of the business.• Transfer of […]

Business Entity Comparison Chart

Entity Accounting and Recordkeeping Fringe Benefits Liability Sole proprietor, singlemember LLC, and husband/ wife business • Schedule C (Form 1040), Profit or Loss From Business• Schedule F (Form 1040), Profit or Loss From Farming• Schedule SE (Form 1040), Self-Employment Tax• IRS Pub. 334, Tax Guide for Small Business• Accounting is less involved than partnerships and […]

Should you Incorporate your Business?

Business incorporation If you’re a sole proprietor, you have probably wondered at some point whether you’d be better off if you incorporated your business. Here are some facts for you to consider. The single biggest benefit of incorporating a business is limiting an owner’s liability. In theory, a stockholder in a corporation risks only his […]

Cash flow statements: The essential report

Cash flow statements One of the most perplexing concepts fcan be understanding cash flow. This is because cash flow is not profits, nor does operating losses necessarily mean poor cash flow. However, cash flow is important. It can be very frustrating when payroll is due and you have no money to pay it. What do […]

Starting a business? Avoid the common pitfalls

If you start your own business, improve your chances for success by avoiding these common pitfalls. Lack of money. You’ll probably need capital to start your business, plus a cash reserve until your business becomes self-sufficient. Plan your cash needs carefully and realistically, and provide a generous cushion for setbacks and unexpected expenses. Consider leasing equipment […]