No it cannot as the sole proprietor is taxed on the profit of the business which belongs to them. The salary must be added onto the profit if taken away in adjustments.
The above is correct and if a bit confusing it is because you should understand that a sole proprietorship is NOT an actual company accounted for seperately from it's owner. It and the owner are one.
Maybe best exemplieifed by anyones expenses in making taxable income are deductible. So the costs (salary) of employing someone to work for you are deductible, and if you make money off that expense and persons work you have taxable income of that amount. In a proprietorship it is most common that for booki-keeping purposes the owner takes a "draw", that is a budgeted cash amount, from the operations. However, cash and profit are not the same and the profit from the operations is what he earns for taxes. It is possible that an owner can actually take a cash draw of XX over the year but that the business would have LOST money and he has no taxable income.
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Sole Proprietors, Patnership and limited liabilities
Sole Proprietors, Patnership and limited liabilities
Barbers do not generally have a salary. They are sole proprietors who have their own equipment and rent a seat from a barber shop. The barber will earn money based on the quantity of people that come in and the amount he charges for services.
Sole proprietors get to make all of the business decisions themselves.
Sole proprietors get to make all of the business decisions themselves.
Sole proprietors get to make all of the business decisions themselves.
Sole proprietors get to make all of the business decisions themselves.
there are three basic kinds of business sole proprietors,partnerships, corporation
There is actually something called a Husband-Wife proprietorship.
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There are some tax advantages, but the biggest for most sole proprietors is not having to answer to anyone - being your own boss.