Online Filing – Simplify Tax ID Filing

Sole Proprietor / Individual Image

Sole Proprietor / Individual

A sole proprietor or individual is a person doing business as an organization. The person is not separate from the company and the company is not incorporated or registered with the state as an LLC or corporation. As a sole proprietor, the business does not exist separately from the owner. This imposes several risks and advantages including that any lawsuits or fines are levied directly against the owner and the risks of the business apply to the owner’s personal assets including home and car. However, as a sole proprietary, you report business income on individual tax returns, vastly simplifying the process and reducing double taxation on income.

Sole proprietorships are ideal for small and micro-businesses because they afford the most simplicity and the most protection from taxation. For example, sole proprietorships don’t have to register with any state they do business in, where LLCs and corporations must do so. However, they put your personal assets at risk, which may be a concern, especially if you are not heavily insured.

Getting an Employment Identification Number is the first steps when…