Announcements

Congratulations to Mary-Ann Andrews, a Sage Strategist, for graduating with a Masters Degree in Business Administration from The University of Phoenix!
Sign up for "Golden Tax Secrets" here.
Cheri Hill will be moderating a panel discussion on Saturday, September 11 at C4CUBE's Entrepreneur's Boot Camp. The panel Cheri will moderate will be entitled, "The Marketplace: Early Decision Making --- The Idea/Market." The event will be held at C4Cube located at 300 East Second Street, Suite 1405 and registration is $99.00 ($175.00 at the door) which includes admission, handbooks & meals. This is a two day camp that will be held on both September 11 and September 12. For more information contact Lynne Keller at 775-622-9900 x 104 or email her at lynne.keller@c4cube.com.
Cheri Hill will be hosting a Sage Teleseminar with Linda McLean and the topic of discussion will be, "I'm Confused --- Are You a Mentor-Coach-Consultant." Linda McLean is a certified business and life coach and they will be discussing how you differentiate between the titles, what to look for and when and if it makes sense for you to utilize an outside consultant for your personal/business life. This teleseminar will be held on Wednesday, September 15, from noon - 1pm. .
Sage will be participating in the NCET Entrepreneurship Expo, Nevada's only Business-to-Small Business Expo. This event is FREE, open to the public and will be held on Friday, September 17, 2010 from 10am - 6pm at the Atlantis Casino Resort & Spa in Reno. For more information feel free to contact Emily Somerville at 775-853-4226 or Emily@NCET.org.
BLOG: Ask Cheri Hill

How to Incorporate - Sole Proprietorship

The term “sole proprietorship” means that the business is the same as its owner. The assets and liabilities of the business are one and the same as the owner. No entity is created; the business is destined to the same financial fate as the owner since they are one and the same.

Advantages

No entity filing requirements – business starts when the owner exercises initiative.
Simple to operate since the owner makes all of the decisions.
May register a trade name to promote its products and services.
Files one tax return – the owner reports and pays all taxes personally.

Disadvantages

Unlimited Liability – The owner is personally responsible for all business losses and must bear them to the full extent of available personal resources. The proprietor is personally liable for all business debts.
No continuity of life – if the owner dies the business transfers to the heirs for continuation, restructuring or closure. There may also be estate tax and probate consequences depending on how large the estate is.
You cannot give away portions of your business (gifting to family members) unless you restructure.
Limited Financing – personal contributions by the owner, bank loans (usually with personal assets pledged as collateral) or other private sources.
IRS Audits - sole proprietors tend to have the poorest record keeping habits, often mixing business and personal finances, which makes them a prime target for the IRS.
Converting to Corp or LLC – since the new entity will have a new taxpayer identification number (EIN) you get to set up your business all over again. Licenses, permits, bank accounts, accounting, payroll, vendor accounts, invoices etc. all need to be established under the new EIN and all documents, stationary, business cards, advertising, marketing, and logo must designate your new identifier which may be Inc. or LLC after the company name.

Tax Implications

Business income and expenses are reported on a separate “schedule” attached to the sole proprietor’s annual Form 1040 individual tax return.
All of a sole proprietor’s net profits are subject to “self-employment” tax (15.3% for Social Security and Medicare). This is equivalent to the payroll tax for employees.
Required to make income tax payments, called “estimated taxes,” four times a year.

“The trick is to stop thinking of it as your money.” – IRS Auditor