Question

Javier is the sole proprietor of a golf shop. Because he is a sole proprietor, any profit Javier’s business earn is ______________________A) totally tax-free.B) tax only once as Javier's personal income.C) Taxed twice once as business income, then again as Javier's income.D) reported on the company's tax return.

Answer 1

Answer:

The correct answer is option B.

Explanation:

A sole proprietorship is a business structure where there is only one owner of the business. The business and the owner are not a separate entity. The owner does not have to share profits but has unlimited liabilities.

The disadvantage is that debts of the business are owner's debts. But also all the profits goes to the owner. The owner is taxed only once as personal income tax.