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The guidelines say that "questions about small business that have no bearing on personal finance" are off-topic, and also request that "if you have a question about a small business, please make sure it directly involves personal finance." This previous meta question/answer suggested that some questions related to small independent businesses (e.g., one-person businesses) would be on-topic, on the theory that "they relate to a fundamental decision all individuals have to make: 'How will I make a living?'". However, it's been suggested that this question about excise taxes is off-topic, although it seems clear to me from the question that the asker is an performing independent services as an individual for some third-party.

Is this on-topic or not?

My own feeling is that virtually anything related to the internal workings of a business consisting of one person should be considered on-topic (and probably the same for businesses consisting of, say, a husband and wife). I say "consisting of one person" rather than "sole proprietorship" because I really mean businesses where it's just one person doing everything (or at least, questions that would apply in that situation). If your business is just you, everything you do with your business is your personal finance, because who else's finance could it be? Even if there are administrative differences between you and the business, ultimately all decisions are made by you and involve only you.

It's true that there are administrative peculiarities to managing your personal finance when you have a business, but I don't see how that makes this intrinsically "not personal finance" any more than the administrative peculiarities of collecting Social Security, making use of tax-deferred investment accounts, or handling a deceased relative's estate, all of which seem to be uncontroversially on-topic.

  • Sounds like we need to update the help. – C. Ross Feb 26 '14 at 21:58
  • The issue with the question that triggered this meta question is that it is a very poor question. The answer is : see an expert. The OP started a company, found customers, generated significant income, and is now interested in their tax situation. They need to find tax help with expertise in their area. – mhoran_psprep Feb 27 '14 at 18:00
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I vote the tax question concerned is on-topic on the basis the asker more than the question itself.

I took the ideas we incorporated into the topic guide to be related to the size of the business, and the size was what made it go out of bounds. If a sole proprietorship owes taxes, then a person owes taxes. We aren't talking about a single person who incorporated, we are talking about a freelancer.

[littleadv wrote:]

If we answer the question about the excise tax of a sole proprietor - why not answer the exact same question (and with the exact same answer) for a corporation? If he was asking how to deduct the excise tax on his schedule C - I'd answer it gladly. But to the question asked - being him a sole proprietor has no bearing whatsoever. Just because he's a business of one person doesn't make the business personal.

In my opinion the size of the business can the deciding factor in fudging a rule a little bit. I absolutely see the point about it being the same answer regardless of the size of the business, but I think we should cater to people asking questions not to the letter of the rules.

I think the point littleadv is making is to avoid the hypocrisy in answering an excise tax question for a solo operation but not for a large business. But we draw similar emotional boundaries for other circumstances. If a poster asks about filing a 1099 but it is homework, we won't answer. However if it is a real problem it gets answered. The intent is why we answer.

The community has been closing a lot of questions lately and that is healthy; the community is deciding the its own boundaries without mods enforcing rules.

However as we gain momentum in closing votes I want to be the devil's advocate for being more inclusive to grow a large, robust and diverse community.

BIG EDIT

However, if the question is a marginal one that doesn't get an answer, perhaps the best course is to close and delete it anyway. The issue of a question being on-topic is less relevant if the question gets no answers.

The remaining discussion is to the speed with which something gets removed, but that isn't what is being asked here:

Summary:

  • Sole proprietors & their finances: on topic
  • Corporate taxes, even for sole proprietors: might be, they have to be judged one by one

Regardless, the site shouldn't have straggler questions so these questionable ones should be cleaned up and removed a little earlier than normal un-answered questions which are clearly on-topic.

  • It may seem like I am arguing against my previous position and too an extent I am. But my real argument is to make sure both sides are represented. I don't see the harm in that question, but I can understand and respect the notion to close it; lest our community lose focus and character. – MrChrister Feb 27 '14 at 5:49
  • The issue I see with these kinds of questions is that they're likely to remain unanswered if open. A lot of people know individual taxation - because they need it for themselves. How many corporate accountants do you think are writing on this forum? – littleadv Feb 27 '14 at 6:59
  • @littleadv - This is a great point; the community will decide if they can answer or not. However in this case, you alluded that you might have an answer. While we won't attract many corprorate accountants, and some questions might get closed, that doesn't mean we have to explicitly rule them out. It can still be a small part of what we can sometimes answer. We can always delete abandoned questions. (Also, please note I am still just being the devil's advocate) – MrChrister Feb 27 '14 at 7:03
  • No, I don't have an answer, I don't have a slightest idea about excise taxes. – littleadv Feb 27 '14 at 7:07
  • @littleadv - ACKCK - I was kind of predicating my argument on that somebody knew the answer! Perhaps this whole argument is a moo point – MrChrister Feb 27 '14 at 7:12
  • @MrChrister: I think it's a little dangerous to start closing off topics just because no one can answer them. I recognize the desire to avoid lots of unanswered questions, but as you said in your answer, ideally over time the site would grow and become more diverse. That's not going to happen if every question that pokes an inch outside the guidelines is immediately closed. – BrenBarn Feb 27 '14 at 7:19
  • @BrenBarn - right, but I certainly don't mean immediately. And the amount of desirability in diversity is another topic altogether. – MrChrister Feb 27 '14 at 7:22
  • +1 to the big edit. – littleadv Feb 27 '14 at 8:35
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At the older meta question Are small business questions on topic? the essential answer, IMHO, was in the comment to my answer:

I think your last sentence sums it up. If the question relates to how the business [affects] your personal finances the question is valid. If it does not affect your personal finances then it is off-topic. – brainimus Aug 5 '10 at 1:10

But, "affects" and "relates" in that statement both need to be interpreted as more proximate to the finances/income, and not a meandering indirect connection from A to B to C to D, thereby including everything under the sun.

I think we need to ask of any small business question: Does it relate directly to affecting the income earned by the single owner/operator/employee, and without being too specific as to the kind of business being run?

For instance, a sole proprietor that sells cheese should not be asking questions about the cheese business, or how to price his cheese, or negotiating costs with suppliers, or about advertising, or about office supplies. While these subjects all could relate somehow and eventually back to income, they aren't close enough to it.

So, no, I don't agree with your suggestion that all single owner/operator/employee small business questions should be on-topic just because it's one individual and therefore personal.

That word "personal" that I included in the site name "Personal Finance & Money" isn't intended to stand alone as a catch-all — it is married to the word "finance" and not the word "business" (or anything else). A question has to be about the finances/money/income parts of such a small business, not any other part of it related back to income by six degrees of separation.

So, IMHO, that does include as on-topic any question about the taxes a business might pay, and whether the business structure is a sole proprietorship, LLC, or corporation — as long as there is only a single owner that is the sole employee. Should your question about the state excise tax be on-topic? I think so, as long as that is a tax that a single owner/operator would face in your state and you're in that boat.

And to take this just a little further, I don't think we should, say, permit LLC/sole-prop questions while disallowing corporation questions, simply because one falls on the personal tax return while the paperwork for the other might be filed separately.

As a contractor operating as a [Canadian] corporation, I file a corporate tax return, and corporate taxes reduce my personal net income and worth as effectively as the personal income taxes do. My accountant, in fact, handles both of my returns, and in his words the tax planning for individuals who own their own small business corporation should be integrated.

So, the chosen legal structure of the business should not be a reason to discriminate. The criteria should be: is the question proximately related to income, and is the business owned & operated by a single individual?

Spouses, perhaps, might be a reasonable inclusion, but I'll leave that an open question. But certainly: if a business has any other staff, or any other owners, then a question about it crosses into the off-topic territory.

  • You're right, I edited my question to clarify. I didn't mean anything at all related to such a business. Obviously it has to relate to finance, and I meant to restrict it only to the "internal" side of such a business. If you start asking about dealing with cheese suppliers you're moving beyond the personal. I agree though that tax questions about a one-person business directly affect that individual's finances (and so should be on topic). – BrenBarn Feb 27 '14 at 6:11
-1

Here's the link to the last discussion we had on this issue (I'm linking directly to my answer which was incorporated into the guidelines).

Here's what I suggested, and the mods agreed, to keep off-topic:

Basically anything else that might have been on topic on OnStartups but doesn't directly relate to personal finance/money. That includes immigration, legal, financing, accounting etc questions that do not directly relate to personal finance.

Re the excise taxes - you can make the same claim about everything. There's always a person involved somewhere, it doesn't make it personal.

Excise taxes are purely business, and do not affect individual finances. They affect business finances. The fact that the business is in this case a sole proprietorship - is incidental and has no bearing on the actual question. It could have been a multimillion corporation, and the question (and the answer!) would remain exactly the same.

From the on-topic FAQ:

Sole Proprietorships

Bookkeeping

Taxes as they pertain to an individual's return

When to incorporate to protect your work or assets

  • My argument is not that because a person is involved, it's personal. My argument is that because only one person is involved, it's personal. The thrust of your argument seems to be that the distinction is between personal and business finances. I can see the logic in that, but is that the distinction the site is meant to recognize? To me the distinction is between decisions that you make about yourself (or your family) and decisions that you make on behalf of or about third parties. – BrenBarn Feb 27 '14 at 4:04
  • @BrenBarn it boils down to the overall scope. If we answer the question about the excise tax of a sole proprietor - why not answer the exact same question (and with the exact same answer) for a corporation? If he was asking how to deduct the excise tax on his schedule C - I'd answer it gladly. But to the question asked - being him a sole proprietor has no bearing whatsoever. Just because he's a business of one person doesn't make the business personal. – littleadv Feb 27 '14 at 4:37
  • I disagree with the "as they pertain to an individual's return" part. Expanded in my answer. As a contractor operating as a corporation, I file a corporate tax return, and corporate taxes reduce my personal net income as effectively as the personal income taxes do. My accountant, in fact, handles both returns, and in his words the tax planning for individuals who own their own small business corporation should be integrated. – Chris W. Rea Feb 27 '14 at 6:00
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    @ChrisW.Rea & LittleAdv, that wording was my interpretation. I can see it was a mistake to use the "return." What about the "finances" in its place? – MrChrister Feb 27 '14 at 6:28
  • @ChrisW.Rea I own stocks in the company I work at too. Should I start asking questions about IFRS-GAAP reconciliation? It does affect my personal tax return, because it affects the company earnings and thus the share price/dividends. Where's the line? – littleadv Feb 27 '14 at 6:34
  • Perhaps degrees of separation is a good definition? Your company IFRS-GAAP issues affect their bottom line, which affects the stocks, which affects your portfolio, which affects your return. Versus my company paid taxes which is less profit which is the exact same as less income. It is a pretty fine line. – MrChrister Feb 27 '14 at 6:51
  • @MrChrister but if we consider ourselves to have expertise in corporate taxation - then why keep it off topic? Why allow questions on these issues only for sole proprietors, even though them being sole proprietors have nothing to do with the question? – littleadv Feb 27 '14 at 6:55
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    I can only answer your question that we allow sole proprietors because of the impact of the direction relationship There is crossover for sure; we cater to one and not the other based on the asker, not the question. (which is I think the argument in a nutshell. I am really looking for a nutshell here...) – MrChrister Feb 27 '14 at 6:59
  • I'm not arguing against allowing sole proprietors. I'm arguing against allowing corporate taxation questions, even if asked by sole proprietors. Do you see the difference? – littleadv Feb 27 '14 at 7:02
  • I believe I do - you are looking for consistency and uniformity in mission; "corporate tax is off topic." I personally see value in that as a way to focus the community. My arguments are all very gray area because not all corporate tax topics are equal. I think my Venn diagram is very sloppy compared to yours =) Mine is mostly weird snakes and double headed arrows. – MrChrister Feb 27 '14 at 7:10
  • @littleadv: I think MrChrister's point in his answer is a good one. We don't have to draw an ironclad line purely based on the nominal topic (e.g., excise taxes). If the intent of the question is to guide one's own personal finance decisions, then we should err on the side of allowing it. If you actually have an IFRS-GAAP question that is going to affect your individual actions on your own behalf, you should be able to ask it (although you might not get an answer). – BrenBarn Feb 27 '14 at 7:12
  • @MrChrister no, no corporate tax topics are equal. I'd answer gladly (and I do) questions about 1120S (but not 1120 regular), K-1s etc. These, while corporate, are also personal. Excise tax is not in that category, IMHO. – littleadv Feb 27 '14 at 7:13
  • @BrenBarn - another point - if we can't answer it and the question is only marginally on-topic to begin with, we should remove it rather than leave it to fester. Which is to say, perhaps were the community was headed on that question was the correct direction </backtrack> – MrChrister Feb 27 '14 at 7:14
  • @MrChrister: I would maybe agree with that, although I'm unsure of the best way to handle it. In that case, it wouldn't be the best idea to mark it off-topic right away, right? Is there a close-vote category for "closing this for 'cleanup' reasons because it was borderline and it turned out no one could answer it"? – BrenBarn Feb 27 '14 at 7:17
  • @BrenBarn - any closed question is subject to cleanup. The community can do it all, or sometimes mods zap a few old ones. – MrChrister Feb 27 '14 at 7:24

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