Is "sole trader" the same as "sole proprietor" for tax purposes?

Answer by  sonicfoundation (2597)

Sole trader is not the same thing as a sole proprietor for tax purposes. A sole proprietor is a business classification with specific conditions.

Answer by  turkishtowel (455)

A sole proprietor is a one-person business, and such persons are the lone person responsible for all income and business transactions. A sole trader is an investor who buys and sells stock. The two terms share the word "sole" but are in no way the same for any tax purposes.

Answer by  cynosure (376)

For US federal income tax purposes, there is no difference between the two (the IRS defines an unincorporated business owned by an individual as "sole proprietorship").

Answer by  JasonBaltimore (18)

Yes. A sole proprietor is a business that is run by an individual but is not incorporated. The simplest version would be a lemonade stand run by a kid. The kid didn't create a company he just started selling lemonade. (If it's with a friend it's a partnership) (Note: sole member LLC's are not "sole proprietor" if treated as corporations).