Law and Taxes

Sole Proprietorship Basics

A sole proprietorship is a business that is owned by one person (and sometimes his or her spouse) and that isn’t registered with the state as a corporation or a limited liability company (LLC). Sole proprietorships are so easy to set up and maintain that you may already own one without knowing it. For instance,...


Simple and Enforceable Contracts

For most contracts, legalese is not essential nor helpful; contractual agreements are best expressed in simple, everyday English. Although lots of contracts are filled with mind-bending legal gibberish, there’s no reason why this has to be true. For most contracts, legalese is not essential or even helpful. On the contrary, the agreements you’ll want to...


Protect Your Business Ideas

People often ask if they can sell an idea of a new product or service to a company that will implement it. But new business ideas that can’t be protected are worth relatively little. I don’t mean necessarily legally protected, but at the very least, protected with marketing momentum, image, and awareness. Relatively few of...


Tax on Internet Sales

Here’s the skinny on Internet sales tax: who pays it, who doesn’t and why it makes a difference to state governments and brick-and-mortar retailers. It’s hardly a secret that shoppers hate paying sales tax and love a tax-free bargain. Case in point, the tax-free shops in airports that are so successful at separating Bahamas-bound travelers...


S Corporation Business Facts and Options

Many entrepreneurs have two goals when choosing a structure for their business: protecting their personal assets from business claims and having business profits taxed on their individual tax returns. Not long ago, an S corporation was the only choice for these business owners. In the last few years, however, the popularity of S corporations has...


How Limited Liability Companies (LLCs) Are Taxed

A Limited Liability Company (LLC) is not a separate tax entity like a corporation; instead, it is what the IRS calls a “pass-through entity,” like a partnership or sole proprietorship. All of the profits and losses of the LLC “pass through” the business to the LLC owners (called members), who report this information on their personal...


How Corporations are Taxed

Corporations are taxed differently than other business structures: a corporation is the only type of business that must pay its own income taxes on profits. In contrast, partnerships, sole proprietorships and limited liability companies (LLCs) are not taxed on business profits; instead, the profits “pass through” the businesses to their owners, who report business income...


How Sole Proprietors are Taxed

As a sole proprietor you must report all business income or losses on your personal income tax return; the business itself is not taxed separately. (The IRS calls this “pass-through” taxation, because business profits pass through the business to be taxed on your personal tax return.) Here’s a brief overview of how to file and...


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