Income for sole proprietors is reported on which schedule as gross receipts subject to self-employment tax?

Income for sole proprietors is reported on which schedule as gross receipts subject to self-employment tax?

• A. Schedule 1
• B. Schedule 2
• C. Schedule C
• D. Schedule H

Answer: (C)

Sole proprietors report their income on Schedule C, which is specifically designed for profit or loss from business activities. This schedule provides a detailed outline of the income earned and expenses incurred by the sole proprietor throughout the tax year. The net profit calculated on Schedule C is then carried over to the individual's Form 1040, indicating the income that is subject to self-employment tax. Schedule C allows the sole proprietor to report gross receipts, which are crucial for determining the taxable income and self-employment tax liability. Unlike other schedules, such as Schedule 1, Schedule 2, or Schedule H, which are used for different types of income or tax liabilities, Schedule C is tailored for business income and the specific calculations related to self-employment. Therefore, it is the correct choice for reporting income as a sole proprietor.

Sole proprietors report their income on Schedule C, which is specifically designed for profit or loss from business activities. This schedule provides a detailed outline of the income earned and expenses incurred by the sole proprietor throughout the tax year. The net profit calculated on Schedule C is then carried over to the individual's Form 1040, indicating the income that is subject to self-employment tax.

Schedule C allows the sole proprietor to report gross receipts, which are crucial for determining the taxable income and self-employment tax liability. Unlike other schedules, such as Schedule 1, Schedule 2, or Schedule H, which are used for different types of income or tax liabilities, Schedule C is tailored for business income and the specific calculations related to self-employment. Therefore, it is the correct choice for reporting income as a sole proprietor.