strategy or if someone is injured as the result of company products or other. The person that owns the business is liable for all aspects of the business and could be drawn into legal actions based on outcomes of liability situations. • Income Taxes: The sole proprietor also reports all earnings and losses through their individual’s tax report filing. • Longevity or Continuity of the Organization: Although it is simple to start a sole proprietorship and it is the most common form of a business
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CHAPTER 1 UNDERSTANDING AND WORKING WITH THE FEDERAL TAX LAW SOLUTIONS TO PROBLEM MATERIALS DISCUSSION QUESTIONS 1. (LO 1) When enacting tax legislation, Congress often is guided by the concept of revenue neutrality so that any changes neither increase nor decrease the net revenues raised under the prior rules. Revenue neutrality does not mean that any one taxpayer’s tax liability remains the same. Since this liability depends upon the circumstances involved, one taxpayer’s increased
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her own name and in which there is only one owner. ( Wikepedia 2008) * Liability- Because there is only one owner all the liability is on the sole owner. * Income Taxes – A sole proprietorship is not a corporation; it does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made, making accounting much simpler. (Wikipedia 2008) * Longevity or continuity of the organization: The sole proprietorship remains in existence for
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business and has the sole rights to the business profits. The owner is responsible for making all business decisions and does not have to defer to partners for decision approvals (Parrino, Kidwell, & Bates, 2012). The life entity of a sole proprietorship is limited (Parrino et al, 2012, p. 572). An advantage of a sole proprietorship is that the profits earned are subjected to lower income taxes (Parrino et al, 2012 p. 572). One of the major disadvantages of a sole proprietorship is that the owner
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makes all the decisions and does not have to engage a legal department to approve contracts. The owner of such a business can only use personal funds even though he or she may have separate checking and savings accounts for the business. The first characteristic of this form of business enterprise is liability. A sole proprietor suffers from unlimited liability. The owner becomes liable personally for all the obligations and debts of the business. The second characteristic is income taxes. Businesses
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Accounting University of Phoenix/ACCT 483 July 20, 2009 Tax Law and Accounting The history and time line of federal, state, and local tax systems within the United States follows events in history that have shaped the current tax laws of today. Today the law is almost inconceivable with so many interpretations and loopholes. In today’s business world not only are companies governed by federal income tax laws, but also accounting guideline established by the national framework of generally accepted
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not connected to receipts of the state insurance for unemployment. This led to the respondent withholding inter alia taxes that were supposed to be paid to the state as per the Federal Insurance Contribution Act (United States vs Quality stores Inc. et al, 2014). The disagreement occurred since Quality stores Inc. believed that severity payments were not taxable as per the Federal Insurance Contributions Act and was seeking a reimbursement on behalf of itself and its 1850 terminated former employees
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Timber Industry Economic Profile Following is a discussion of the timber industry including how several economic factors affect it, including: price elasticity of supply and demand; positive and negative externalities; wage inequality; and monetary and fiscal policies. Price Elasticity Important to note is that the timber industry and the lumber industry are not one in the same and experience differences price elasticity. The price elasticity of demand for the timber industry is inelastic
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sole proprietorship, partnership, limited liability partnership, limited liability company, S corporation, franchise, and corporate form. Formation, Taxation, Control, Liability, Employee Issues, Federal, State and/or local laws affect ting the type of business, and Dissolution. Different forms of business are customized to suit corporations due the amount of liability that is spread throughout the business. One form of business may be a safer and more profitable alternative because investors
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Hospitals around the United States Hospitals were not always large, nor did they have the technology that is used in today’s time. Hospitals did not exist until around 1736, in which they were referred to as almshouses (Hospitals, 2013). Almshouses were first founded in New York and could treat up to 6 or 7 patients at one time (Hospitals, 2013). After the New York almshouse was successful, new hospitals started to appear all over the United States. The US now has around 5,000 community hospitals
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