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Self-employment has its appeal, especially when businesses aren’t creating jobs fast enough for the nation’s unemployed.
A person who chooses this route might be a sole proprietor in a trade or business — for example, a plumber or cabinetmaker — or she might be an independent contractor, an insurance agent, limited liability corporation member or a partner in a business. These taxpayers are treated as independent contractors by the Internal Revenue Service and must be aware of the responsibilities and benefits of being self-employed. They will quickly become familiar with Schedule C – the IRS’ self-employment form.
Anyone who pursues a trade or business to make a profit must file a Schedule C form along with the standard 1040 income tax form. The Schedule C (Profit or Loss From Business) summarizes gross income and profit, business expenses or deductions and net profit or loss.
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