Shaquel is considering starting his own business but has been an employee for all of his working life. He is interviewing a professional financial consultant to better understand how this shift to entrepreneurship might affect his taxes. What will the financial consultant MOST likely say?

Question

(1 point)
Responses

Entrepreneurs typically have a “company” that will set taxes aside and pay them, but employees have to save and pay taxes themselves.

Entrepreneurs typically have a “company” that will set taxes aside and pay them, but employees have to save and pay taxes themselves.

As an employee he paid 10 percent in taxes but business owners only pay 5 percent, so he would be paying less in taxes as a business owner.

As an employee he paid 10 percent in taxes but business owners only pay 5 percent, so he would be paying less in taxes as a business owner.

Employees file their taxes twice a year, whereas business owners file once a year, so this would be an adjustment.

Employees file their taxes twice a year, whereas business owners file once a year, so this would be an adjustment.

As a business owner he will have some tax advantages in terms of items he can “write off” on his taxes to save money.

Answer 1

The financial consultant will MOST likely say:

As a business owner he will have some tax advantages in terms of items he can “write off” on his taxes to save money.

This response highlights the potential tax benefits associated with entrepreneurship, such as deductions for business expenses that can lower overall taxable income, which is a key consideration for someone transitioning from employee to business owner.