Business classifications
An unincorporated business run by one person. It is easy to form but offers no personal liability protection, meaning the owner is personally responsible for all business debts.
What is Sole Proprietorship?
The actual good or service offered to meet customer needs.
What is a product?
Employee pays 7.65%; Employer pays a matching 7.65%.
What is a W-2?
Uses your own money and is limited
What is a debit card?
Levied on an individual's or business's income at federal and, in most cases, state levels.
What is Income tax?
An agreement for two or more people to own a business together
What is Partnership?
The actual good or service offered to meet customer needs.
What is price?
Contractor pays the full 15.3% as self-employment tax.
What is a 1099?
Borrows money and has to pay back
What is a credit card?
A consumption tax on the sale of goods and services.
What is sales tax?
Keeps personal assets separate from business.
What is Limited Liability Company (LLC)?
The systems and procedures involved in delivering the product or service efficiently and effectively.
What is process?
Allocates income to needs, wants, and to savings/debt repayment.
What is the 50/30/20 budget rule?
Makes loans cheaper (boosting spending/growth) but yield less on savings.
What are low interest rates?
Levied on real estate or personal property, usually at the local level.
What is property tax?
A separate legal entity from its owners (shareholders). Like Nike, Mcdonalds, etc.
What is a corporation?
The systems and procedures involved in delivering the product or service efficiently and effectively.
What is physical evidence?
A fixed amount set by the IRS that most taxpayers can claim. For many people, this is simpler and larger than itemizing.
What is Standard deduction?
Makes borrowing expensive (cooling economy) but offer better returns for savers, impacting mortgages, credit cards, investments, and overall economic activity.
What is high interest rate?
Annual tax statement an employer provides to an employee, showing their total wages and other compensation, as well as the amount of federal, state, and other taxes withheld from their pay during the year.
What is a W-2?
U.S. federal government agency responsible for tax collection and tax law enforcement.
What is the IRS? Internal Revenue Service
Low interest rate is best on this card.
What is a credit card?
These governments collect various taxes (income, sales, etc.) to fund their respective operations and services.
What are Federal & State taxes
Responsible credit use (timely payments, low utilization) is reported to credit bureaus and builds a good credit history/score.
Which is essential for future loans (e.g., mortgage, car loan)?
These forms and concepts relate to independent contractors and self-employed individuals:
What is 1099 and 1040?