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A blog to help freelancers with taxes - Collective

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Sole proprietorship

Blog

The Sole Proprietor’s Mid-Year Check-In: Is Your Setup Still Working for You?

Most people who start working for themselves don’t sit down and choose a business structure. They start taking…

Jun 11, 2026 · 6 min read
Business Setup

The Best Structure for Solo Consultant Taxes

Running a consulting practice means wearing every hat. Account executive, project manager, delivery lead, and eventually, the person…

May 6, 2026 · 5 min read
Business Setup

Formation Solutions for Solopreneurs: A Comparison Guide

For a solopreneur, forming an LLC is one of the most consequential early decisions you’ll make — not…

Apr 30, 2026 · 5 min read
Business Formation

Sole Proprietorship In California: A Guide for Solopreneurs

Starting a business comes with responsibilities. And it can seem complicated from the outside. But most states and…

Oct 28, 2021 · 11 min read
Blog

Self-Employed Retirement Plans: Which is the Best for You?

When you work for yourself, no one is automatically setting money aside for your retirement. That responsibility is…

Aug 10, 2020 · 7 min read
Blog

8 Loans Small Business Owners Should Know About During the Coronavirus Outbreak

We get it. The news regarding how the recent coronavirus pandemic is affecting small businesses is alarming. With…

Apr 1, 2020 · 7 min read
Blog

LLC vs S Corp for Freelancers: Which Should You Choose?

Even when you’re a one-person business, tax and legal matters are inevitable. And when it’s all you, you’re…

Dec 5, 2019 · 15 min read
Blog

Can you afford to be an S Corp?

S Corps have a lot of buzz about them. If they were at Beverly Hills High in the…

Jul 25, 2019 · 5 min read
Blog

Why are you still a sole proprietor? It’s time to switch

There comes a moment in every young freelancer’s life when it’s time to level up their business, kind…

Jul 18, 2019 · 4 min read
Business License

Washington State Business License: What You Need to Know

If you run a business in Washington, you’ll need a Washington state business license, permit, or certificate of…

Jun 3, 2019 · 6 min read
Business License

Utah Business License: What You Need to Know

If you run a business in Utah, you’ll likely need a Utah business license, permit, or certificate in…

Jun 3, 2019 · 6 min read
Business License

How to Get a Business License in Florida: A Step-by-Step Guide

Starting a business in Florida? You may be wondering, ”Do I need a business license?” The answer is…

Jun 3, 2019 · 10 min read
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First, tell us about your business

Net profit = Total revenue - total expenses

  1. Find total revenue. Add up all money your business earned from sales of goods or services during the year.
  2. Subtract your expenses. Deduct all business costs like supplies, rent, utilities, software, contractor payments, and loan interest.

An estimate is fine, you don't need exact figures.

W2 employees are people on your payroll

You withhold income tax, Social Security, and Medicare from their paychecks, and they get a W-2 form from you at the end of the year.

Don't count yourself (even if you pay yourself a salary) or 1099 contractors and freelancers.

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We are experts in the unique needs and challenges of self-employed people and know that our confidence gives others confidence, too. Reach out to say hello and join our team.

We are experts in the unique needs and challenges of self-employed people and know that our confidence gives others confidence, too. Reach out to say hello and join our team.

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Collective provides a suite of tools, back-office support, and general information. Our services are not intended as tax, legal, or professional advice.

* Savings estimates reflect the average 2023 federal self-employment (SE) tax savings for Collective members with an S Corp tax election, based on business profits that would've otherwise been subject to SE tax. Actual savings will vary based on individual circumstances.

** Based on data sourced from Shopify blog, QBO Essentials, QBO Live, Gusto, Taxfyle, Intuit "Tax Pro" Research, LegalZoom and JustAnswer.com as of August 2025.

† Individual tax return packages are billed as an annual, one-time add-on fee.

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