Proprietorship Taxes

Running a business on your own is exciting – you get to follow your dreams and be your own boss. But there’s also hard work and lots to think about – including sole proprietor taxes. If you weren’t aware, you are a sole proprietor or don’t know where to start where taxes for sole proprietorships are concerned, take heart – we’re here for you.

As a sole proprietor, you’re entitled to all the profits of the sole proprietorship, and personally responsible for the business’ losses and liabilities.

Sole proprietorship taxes have some differences and similarities compared to other business entities.

As a sole proprietorship, your business and your income are not separated. This means your business itself isn’t taxed as a separate entity. This is referred to as a pass-through entity – similar to a partnership.

Taxes for sole proprietorship owners are similar to other business entities in that you have the responsibility to pay all income taxes on the profits your business accumulates throughout the year – and the self-employment taxes on those profits. Additionally, if the total tax from all sources is $1,000 or more, you should pay quarterly tax payments. (Note: This is based on your total tax owed, not just the tax from Schedule C.)

Sound daunting? We’re here to help! Block Advisors small business certified tax pros can help with the complexities of small business taxes. As a self-employed individual or small business owner, you have a lot on your plate. Our team is your team.