Question

Maria runs a small business out of her home. She has expenses of $2,000 per year and uses the cash basis method of accounting. Her only employee is her cousin who works for her part-time. What form should she use to report her business income?

Answer 1

Maria should use Schedule C to report her business income.

Step-by-step explanation:

Anyone who is running a business (as a single owner not in partnership) has to fill the Schedule C form while filling annual tax returns.

Schedule C:

It is profit or loss form of a business and tells the income as well as deductible expenses of a business for a tax year.

Note:

If someone is operating more than one business then he or she has to file a separate Schedule C for each of business.