Working as an individual, without any employees, is a great way to run many freelance businesses. You will be signing agreements with companies as an independent contractor, which means you will not receive any benefits, overtime pay or other advantages of being a salaried employee. Let’s explore the reasons you should register as a sole proprietorship in today’s post.
Have you been filing your own tax returns? If so, do you want to continue doing so? Then you should register as a sole proprietorship. This allows you to file your own tax returns, reporting your self-employment income on Schedule C on the federal tax return.
Sole proprietorships are incredibly easy to manage. You don’t have to file a ton of paperwork each year to keep up with your records or anything other issues. You can simply pick a business name, promote your business, find clients and perform your services. You can then collect all the money from your hard work and report it on Schedule C.
Do you have financial problems right now as you launch your business? If so, you should choose a sole proprietorship for your company. Why? Even filing for an LLC can cost you a couple of hundred dollars in filing fees. It doesn’t cost a thing to register as a sole proprietorship.
Do you want to be the only person who makes the decisions for your business? If so, sole proprietorship is the only way to go. You won’t have a partner to fight you on decisions or make changes behind your back.
Registering your business as a sole proprietorship obviously has its advantages. There are so many tax benefits you can take advantage of and you won’t have to worry about paying payroll taxes for any employees of your own.