Starting Your Business as a Sole Proprietorship

Russell Maynard: The simplest type of business to form is a sole proprietorship.  In fact, there is no formation of an actual entity at all.  The owner simply starts working and having a business.  The tax filings associated with a sole proprietorship are made with the owner’s individual tax return, or 1040.  Much like LLC’s and S-Corporations, sole proprietorships may be eligible for the QBI deduction, which is a deduction that lowers taxable income.  The primary drawback to a sole proprietorship is the lack of liability protection.  As a sole proprietor, your personal assets are subject to any liability claims or the claims of any creditors that come about as a result of your business activity.