Filing taxes can be stressful. But when you’re a small business, knowing the line between personal filing or business filing can seem a little blurry. This is especially true if you’re a sole proprietor.
But it doesn’t have to be confusing; there are different requirements for filing depending on how your business is organized.
Business Taxes vs. Personal Taxes
Business and personal taxes have one thing in common: they are based on taxable income. But how you pay income taxes depends on the business structure.
The income is taxed on the owner’s personal taxes if you are a pass-through entity. And if you own a corporation, taxes are filed separately from personal—the corporation files as a business….