SUBSCRIBE
Enter your Name and Email address to get
the newsletter delivered to your inbox.
Please include name of person that directed you to my online newsletter so I can thank them personally.
Ken Coulthard, CFP®
Program Manager, Financial Advisor
Southeast Financial Wealth Management
5110 Maryland Way, Suite 100
Brentwood, TN 37027
Phone: 615-371-3737
Fax: 615-377-0090
TollFree: 800-521-9653, Ext 2317
March/April 2024
Tips for Sole Proprietors
As sole proprietor of your small business, you’re responsible for everything from filing taxes to setting up your retirement plan. Your financial and tax professionals can help you take advantage of retirement plan and business deductions to help reduce your income tax bill.
First Up: A Retirement Plan
A solo 401(k) plan is a popular choice for sole proprietors. The business owner contributes to the plan as both employer and employee, up to the annual contribution limit for 401(k) plans. A SEP (Simplified Employee Pension) IRA is another option for sole proprietors or small businesses with only a few employees. Only the employer is allowed to make contributions to the plan. The same percentage of compensation must be contributed to employee accounts as the employer contributes to his or her own account.Line Up Your Deductions
With a sole proprietorship, all business income and tax deductions are reported on your individual income tax return. Your tax professional can help you make the most of deductions that can lower your tax bill, including:Health Insurance. You generally can take an above-the-line deduction for the cost of health insurance for yourself, your spouse and your dependents. The deduction is limited by the amount of your taxable income, so it isn’t available if your business has a loss.
Business Expenses. Deductible expenses include utilities, subscription services, travel and capital assets., You may be able to take the home office deduction for a portion of rent and utilities if an area of your home is dedicated exclusively to your business.
Self-employment Tax. Sole proprietors must pay both the employee and employer portion of self-employment tax (Social Security and Medicare.) You are allowed to deduct half the tax on your return.
A Different Business Structure
As your business grows, you may want to consider a different business structure that offers liability protection. An LLC (limited liability company) is the simplest way to structure a business and protect your assets. An S-corporation eliminates your liability and allows you to save on unemployment taxes. However, your Social Security benefits could be reduced. Your financial and tax professionals can help you structure your business appropriately.519731
CONTACT US
Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.
Ken Coulthard is a financial advisor with, and securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Southeast Financial Credit Union and Southeast Financial Wealth Management are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Southeast Financial Wealth Management, and may also be employees of Southeast Financial Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of, Southeast Financial Credit Union or Southeast Financial Wealth Management. Securities and insurance offered through LPL or its affiliates are:
The sender and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.
The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.