Which IRS form helps sole proprietorships calculate profit or loss and track total business income and deductions?

The form that assists sole proprietorships in calculating their profit or loss, as well as tracking total business income and deductions, is Schedule C. This form is specifically designed for reporting income and expenses related to a sole proprietorship. It allows business owners to detail their gross receipts, cost of goods sold, and various deductible business expenses, such as office supplies, salaries, and utilities. By summarizing this information, Schedule C helps in determining the net profit or loss from the business, which is then transferred to the individual’s personal tax return.

In contrast, Schedule A is used for itemizing deductions on individual tax returns, but it does not pertain to business income or expenses. Schedule D is meant for reporting capital gains and losses from investments, while Schedule SE is used for calculating self-employment tax. These forms serve different purposes and do not provide the comprehensive overview of business income and expenses that Schedule C does.