What is a sole proprietorship? - Intuit Turbo Real Money Talk

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What is a sole proprietorship?

Being self-employed means you’re a sole proprietor and your business is a sole proprietorship.

Sole proprietorships:

  • Are owned by one person—you don’t have any partners
  • Are unincorporated—you haven’t filed any legal forms to incorporate your business
  • Have no legal distinction between the owner and the business—you are entitled to all the income, but also must pay the bills, including taxes

A married couple can be considered sole proprietors when they elect on their 1040 to treat their jointly owned and operated business as a qualified joint venture.

Organizations that aren’t sole-proprietorships:

  • Partnership
  • Corporation
  • S Corporation
  • Limited Liability Company (LLC), except a single-member LLC that doesn’t elect to be treated as a corporation

When you’re a sole proprietor, you will need to file Form 1040 (Individual Income Tax Return) with a Schedule C to calculate your net profit or loss.

Once we determine you have self-employment income, we create your Schedule C and also review the income and expenses associated with your business.

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