Comments on: How is a Sole Proprietor Taxed? http://www.obliviousinvestor.com/sole-proprietor-tax/ Investing Blog: The Oblivious Investor Mon, 06 Feb 2012 20:02:26 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Mike http://www.obliviousinvestor.com/sole-proprietor-tax/comment-page-1/#comment-5427 Mike Mon, 05 Jul 2010 15:10:24 +0000 http://www.obliviousinvestor.com/?p=5791#comment-5427 Indeed. Thank you for mentioning that. Indeed. Thank you for mentioning that.

]]> By: John Scherer http://www.obliviousinvestor.com/sole-proprietor-tax/comment-page-1/#comment-5426 John Scherer Mon, 05 Jul 2010 14:12:08 +0000 http://www.obliviousinvestor.com/?p=5791#comment-5426 Mike - found your blog a few months ago and really enjoy it. This is a great post, so many people who have side jobs or are just starting out don't understand how much they need to make in estimated payments. Just wanted to point out that for taxpayers who earned $150,000 joint or $75,000 single in the previous year they have to have estimates equal to 90% of current year or 110% of previous year to meet the safe harbor. Keep up the good work - John Mike – found your blog a few months ago and really enjoy it. This is a great post, so many people who have side jobs or are just starting out don’t understand how much they need to make in estimated payments.

Just wanted to point out that for taxpayers who earned $150,000 joint or $75,000 single in the previous year they have to have estimates equal to 90% of current year or 110% of previous year to meet the safe harbor.

Keep up the good work – John

]]> By: Mike http://www.obliviousinvestor.com/sole-proprietor-tax/comment-page-1/#comment-5425 Mike Mon, 05 Jul 2010 14:06:52 +0000 http://www.obliviousinvestor.com/?p=5791#comment-5425 Actually, just forming an LLC doesn't change anything regarding (federal) taxation. After forming an LLC, however, you can then elect S-corp taxation or C-corp taxation should either of those be beneficial. I've written a bit about it <a href="http://www.obliviousinvestor.com/llc-vs-s-corp-vs-c-corp/" rel="nofollow">here</a> before. Actually, just forming an LLC doesn’t change anything regarding (federal) taxation. After forming an LLC, however, you can then elect S-corp taxation or C-corp taxation should either of those be beneficial.

I’ve written a bit about it here before.

]]> By: Miranda http://www.obliviousinvestor.com/sole-proprietor-tax/comment-page-1/#comment-5424 Miranda Mon, 05 Jul 2010 13:59:01 +0000 http://www.obliviousinvestor.com/?p=5791#comment-5424 You make an excellent point about record keeping! Another thing to consider is that a LLC can have benefits over a sole proprietorship. I'm not a tax professional, of course, my my accountant switched me to a LLC, and I pay most of my distributions to my partner, who is the limited partner. This reduces the amount of money that I have to pay self-employment tax on, and has saved me a bundle. At least, I think that's how it works...I do know that my tax bill has been lower since I switched from a sole proprietorship to a LLC. You make an excellent point about record keeping! Another thing to consider is that a LLC can have benefits over a sole proprietorship. I’m not a tax professional, of course, my my accountant switched me to a LLC, and I pay most of my distributions to my partner, who is the limited partner. This reduces the amount of money that I have to pay self-employment tax on, and has saved me a bundle. At least, I think that’s how it works…I do know that my tax bill has been lower since I switched from a sole proprietorship to a LLC.

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