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 net profit of the business. Transfer of ownership can be complex. Limited access […]
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Sole proprietor, single-member LLC, and spouses-owned business Entity 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 and Recordkeeping Accounting is less involved than partnerships and corporations. Double-entry bookkeeping is not
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Representation Individual taxpayers who are under audit by the IRS may attend the audit in person without any assistance from a tax professional. However, this can be a dangerous mistake. Al-though not officially stated, it is the job of an IRS Revenue Agent to conduct an audit with an eye toward finding ad-ditional tax owed.
Alternative Minimum Tax (AMT) The alternative minimum tax (AMT) was originally enact-ed to ensure that high-income taxpayers pay at least a min-imum amount of tax if they benefit from certain deductions and other tax preference items. The AMT tax computation is a parallel system to the reg-ular tax system with its own definitions of income
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Standard Mileage Rate Cross References Rev. Proc. 2010-51 Announcement 2022-13 Notice 2023-03 The IRS has released the 2023 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, med-ical, or moving expense purposes. The following chart reflects the new 2023 standard mileage rates compared to the
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