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​Self-employment on tax forms

When a person files a federal tax return that reflects his or her self-employment income and there has not been a substantial change, use it and any attachments to calculate the person’s self-employment income. The following chart shows which forms and lines to use based on the business’s ownership structure.

Where to find self-employment income on a tax return? (Effective September 16, 2019)

Ownership Structure ​Advantages ​Tax Forms ​Where to look for gross self-employment income?
​Sole Proprietorships or Contract Employees A single person operates a business and is fully responsible for all losses and receives all profits.
There are not any special forms or rules to establish this type of business.
The client files a 1040 with a Schedule C. Use the gross income on line 3 of the Schedule C.
​Partnerships Two or more persons agree to conduct a trade or business.
Members share profits and losses.
Each partner pays taxes individually. The IRS does not tax the partnership.
Partnership files an informational return with the IRS.
The partnership files a Form 1065 and supplies the client with a Schedule K-1.
The partner (client) files a 1040 and Schedule E for income tax or Schedule SE for self-employment tax.
Determine if the client is a general or limited partner. This information is on line G of the Schedule K-1.
For a general partner, add the totals on lines 1, 4, and 14c to determine the amount of self-employment income.
For a limited partner, add lines 4 and 14C to determine the amount of self-employment income. The amount on line 1 is unearned income for a limited partner.
​S corporations S corporations avoid most corporate taxes because corporate income, losses, deductions, and credits pass to their shareholders for federal tax purposes.
The corporation files an informational return with the IRS.
The corporation files Form 1120-S and supplies a Schedule K-1 to the shareholder (client).
The shareholder (client) files a 1040 and a Schedule E that reference the K-1.
Persons who have an interest in a corporation do not qualify for the business expense deduction.
Use the gross income on line 1 of the client’s schedule K-1 for profit sharing income. This is unearned income.
​Limited Liability Company The IRS does not recognize limited liability companies. The IRS categorizes a LLC as sole proprietorship, a partnership, or corporation. ​Check to see which IRS tax return the client completes. Treat the LLC as a sole proprietorship, a partnership, or corporation based on how the business filed its federal taxes.
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