Ever thought to yourself that you might like to be in business? Chances are you probably already have been at some point in your life, at least in one form or another. Mown a lawn for cash? Business. Babysat for pay? Business. Did you put that income on your tax return? Likely not. Were you required to? Likely yes.
What you’ve done is work as a sole proprietor, maybe without even realizing it. And there’s a few advantages to that: the sole proprietor doesn’t have to worry much about anybody else’s approval, except, of course, the customer’s. You’re your own boss.
But you also have to face the responsibilities of being a business owner all by yourself as well. And those risks are huge. As a sole proprietor, you are totally and personally liable for any mistakes made on the job by you and your employees. There are other issues that will probably emerge as your business grows more and more successful. Accurate bookkeeping and regular self-employment tax payments become crucial. Increasingly complicated tax issues could lead to an IRS audit.
While many business advisors will tell you that the sole proprietor doesn’t need legal advice for the business, it’s extremely important to retain a tax professional. Sound guidance can help you avoid the inevitable pitfalls that crop up along the way to financial viability as a sole proprietor.
So if you think you may unintentionally be engaging in business, call Law Offices of Christy Lee, P.C., to put into place safeguards that will protect both you and your family from personal liability.