Tax obligations can be hard to understand and deal with. This is especially true when looking at two types of businesses: sole proprietorships and corporations.

1. Sole Proprietorships:

   • These businesses are taxed like individuals. This means that as their income goes up, so do their tax rates.
   • Owners need to pay self-employment taxes. If a person makes more than $400, they could owe up to$15,300 in self-employment taxes.

2. Corporations:

   • Corporations face something called double taxation. This means they pay taxes on their profits, and then shareholders pay taxes again when they receive dividends.
   • Dealing with taxes for corporations can be really complicated. They might need expensive accountants to help follow all the rules.

Solutions:

• Talking to tax professionals can help make things easier. They know the rules and can help businesses plan and save on taxes.
• Using tax software can also make filing taxes simpler. This helps reduce stress for all types of businesses.