When business and household costs are incurred jointly (for example, telephone bills when the telephone is used for personal and business calls, and travel using a personal auto for business purposes), allocate the respective portions to the business unit and the household. Then pay the business and personal amounts from the respective bank accounts. A relatively small investment of effort in bill paying and record keeping can ensure you have the data needed for filing and substantiating your income tax returns.
Advantages of the Sole Proprietorship
- In large part, the advantage of the sole proprietorship is in its simplicity and flexibility.
- A sole proprietorship can be established, modified, bought, sold, or terminated very quickly.
- No business planning or organizational arrangements are required when a sole proprietorship is established. Of course, that can also work to your detriment.
- A sole proprietorship involves minimal legal formalities and registration requirements to begin and maintain.
- A sole proprietor has total autonomy or decision-making authority.
- A sole proprietor enjoys all the income of the school.
- All school assets (equipment, inventory, property, etc) are owned by the sole proprietor.