What form must a sole proprietor complete with their federal income tax return?

A sole proprietor reports their business income and expenses on Schedule C, which is used to detail profit or loss from a sole proprietorship. This form allows the sole proprietor to calculate net earnings from their business, which is then transferred to their Form 1040, the individual income tax return.

Schedule C becomes essential for sole proprietors because it is the primary means by which they report the income generated by their business activities, as well as any eligible expenses that can reduce that income, leading to a lower overall tax obligation.

While Form 1040 is necessary for filing an individual tax return overall, Schedule SE, which is used to calculate self-employment tax, and Form 1099-MISC, which reports miscellaneous income, are not specifically for reporting the business income of sole proprietors in the same way that Schedule C is. Thus, Schedule C is the most accurate choice for indicating what form a sole proprietor must complete alongside their federal income tax return.