The simplest business structure where you and the business are legally the same entity.
A sole proprietorship is the default business structure for anyone who goes into business alone without forming an LLC or corporation. There's no legal separation between you and your business—you report all business income and expenses on Schedule C of your personal tax return.
LLCs offer liability protection but don't change your taxes (single-member LLCs are taxed like sole proprietorships). Consider LLC for liability protection or S-Corp election for tax savings on high income.
You report business income on Schedule C, pay self-employment tax on Schedule SE, and make quarterly estimated tax payments throughout the year.
AlphaTax helps self-employed professionals maximize tax savings with AI-powered expense tracking.
Start Free Trial