Explain how a sole proprietorship is taxed

What will be an ideal response?


A sole proprietorship is not a separate legal entity, so it does not pay taxes at the business level. Instead, the earnings and losses from a sole proprietorship are reported on each sole proprietor's personal income tax filing. A sole proprietorship business earns income and pays expenses during the course of operating the business. A sole proprietor has to file tax returns and pay taxes to state and federal governments. For federal income tax purposes, a sole proprietor must prepare a personal income tax Form 1040 U.S. Individual Income Tax Return and report the income or loss from the sole proprietorship on his or her personal income tax form. The income or loss from the sole proprietorship is reported on Schedule C (Profit or Loss from Business), which must be attached to the taxpayer's Form 1040.

Business

You might also like to view...

Posting to the accounts receivable subsidiary ledger from the sales journal should be done

a. daily; b. weekly; c. monthly; d. annually; e. quarterly

Business

According to a study examining the status of sales as a true profession, sales meets the professional criteria of _____ through professional organizations such as the Strategic Account Management Association (SAMA) and through a common sales vocabulary such as that found in textbooks and training materials.

A. ensuring the welfare of internal and external stakeholders B. making a significant contribution to society C. having a defined culture and organization of colleagues D. developing a well-established routine for salespeople E. adhering to a uniform ethical code

Business

Which dimension of personality from the Big Five model focuses on being thoughtful, organized, responsible and achievement-oriented?

a. Agreeableness b. Conscientiousness c. Neuroticism d. Extraversion

Business

The most significant trends in today's dynamic workplace include global competition, team-based projects, flattened management hierarchies, new communication technologies, and ________

A) fewer written messages B) more homogeneous workforces C) expectations of around-the-clock availability D) stricter dress codes

Business