What is a solopreneur, and what kind of business can a solopreneur form or develop? The term “solopreneur” is often used interchangeably with "entrepreneur," "freelancer," "self-employed" or "small business owner,” perhaps since all of them will likely have to pay self-employment taxes and file 1099 forms. While any of these terms may be simultaneously valid for your business, there are distinctions between them.

I help many small businesses with tax planning and filing. Many new entrepreneurs have to decide between an LLC (limited liability company) and a sole proprietorship. The truth is that, although the selection of a business entity is an essential decision, there isn’t one single answer to the question of LLC vs. sole proprietor. The implications for liability and tax status are two of the issues to consider.