Which type of tax return is required for a self-employed individual?

• A. Form 1040
• B. Form 1099
• C. Schedule C
• D. Form 8889

Answer: (C)

A self-employed individual is required to file a Schedule C as part of their tax return. Schedule C is specifically designed for reporting income or loss from a business operated as a sole proprietorship. This form allows self-employed individuals to detail their business income, expenses, and ultimately calculate their net profit or loss, which is then transferred to their individual Form 1040.

While Form 1040 is the individual income tax return that includes all sources of income, it does not capture the specific details of self-employment income and expenses. Form 1099 is used by businesses to report payments made to independent contractors, but it is not a tax return form for the self-employed individual. Form 8889 pertains to Health Savings Accounts, which is unrelated to reporting self-employment income. Therefore, Schedule C is essential for accurately presenting the financial aspects of self-employment on the tax return.