Sole Proprietorship Business Formalities
If you choose to operate as a sole proprietor, you’ll still have to take care of some business formalities, prepare your business’s taxes, and manage other concerns. As for business formalities, you still likely have to:
- Secure appropriate business licenses
- Obtain permits for any real estate owned by your business
- Apply for registration and/or franchise numbers
In regard to taxes, you’ll have to keep track of your taxes for federal income tax purposes (and likely also state and local income tax purposes).
Federal Tax Forms for Sole Proprietorships include:
- Form 1040: Individual Income Tax Return
- Form 1040-ES: Estimated Tax for Individuals
- Schedule C (or C-EZ): Profit and Loss from a Business
- Schedule SE: Self-Employment Tax
- Form 8829: Expenses for Business Use of Your Residence
- Form 4562: Depreciation and Amortization
As you can see, you’ll still have to take care of business formalities and tax issues to properly create and maintain your sole proprietorship.
Finally, let’s wrap up this article with some highlights and additional considerations.