Discuss financial statements for the chosen business structure, then explain with specific examples from the University Library, how these would help you make decisions about your business.
Cite a minimum of two peer-reviewed references.
Format your paper consistent with APA guidelines.
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The tax-related disadvantages of a sole proprietorship business include that the owner has to pay a self-employment tax and income tax since the income from the business is considered as the personal income of the owner which has a disadvantage in that earning higher income from the business places the owner into a higher tax bracket (Cooper et al., 2016). This is also a disadvantage to partnership form of business since partners are treated as sole traders when paying taxes. Just like a sole proprietorship, partnership business is also subject to self-employment tax. Corporations have several tax-related advantages which include tax deductions on the health insurance premiums that they pay on behalf their employees. Corporations are also exempted from self-employment taxes while another major advantage of corporations includes the lower rates of corporate taxes compared to the rates of the personal income taxes paid by sole proprietors and partners. Profits in a corporation form of business can also be left to expand the business further which offer tax advantages.
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Legal business categories and financial statements
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Legal business categories and financial statements
