Which tax form is specifically used by self-employed individuals?

Self-employed individuals use Schedule C (Form 1040) to report income or loss from a business they operated or a profession they practiced as a sole proprietor. This form allows them to detail earnings and expenses, ultimately leading to the calculation of their net profit or loss, which is then reported on their personal income tax return (Form 1040). Schedule C is crucial as it provides the necessary information for determining self-employment tax, which self-employed individuals are responsible for, including both the employer and employee portions of Social Security and Medicare taxes.

Form 1065 is utilized for partnerships, allowing multiple owners to report their business financials collectively. Form 1120 is designated for corporations, specifically C corporations, and is used to report their income and expenses. While Form 1040 is the individual income tax return form, it alone does not capture the specific business income and expenses associated with self-employment; that’s where Schedule C becomes essential.