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Revisión del 06:04 16 oct 2024
Many small individuals start with a sole proprietorship to avoid the costs of forming a corporation or LLC. It is a wise decision as statistics show that a majority of small businesses lose cash for the first several years.
Now we calculate if you find any income tax due. Assuming for now that not one other income exists, we calculate taxable income getting the profit from the business ($20,000) and subtract regular deduction (which is $5,950 for 2012) less the exemption deduction (which is $3,800 for 2012). The taxable income would then be $20,000 - $5,950 - $3,800 which equals $10,250. Based on tax law the additional income tax due for duty would be $1,099. So, the total tax bill for this taxpayer should be $1,099 + $3,060 for a total of $4,159.
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