FORTUNE Small Business:

Tax troubles: Separating business income

A sole proprietor turns to FSB for help filing his income taxes.

Subscribe to Top Stories
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

income_tax.03.jpg
Ask FSB
Get small-business intelligence from the experts. Here's a chance for YOU to ask your pressing small-business questions, and FSB editors will help you get answers from the appropriate experts.
Your name:
* Your e-mail address:
* Your city:
* Your state:
* Your daytime phone #:
* Your questions:

(FORTUNE Small Business) -- Dear FSB: Can I register as a sole proprietor of a small business and be taxed separately from my wife's and my income tax? Or do I have to include the income from the small business on our federal and state forms? If so, what forms will I have to use?

- Anthony, Detroit

Dear Anthony: According to Walter Robinson from Walter Robinson & Associates LLC, a Chicago firm that provides tax and accounting services to small businesses, you cannot be taxed separately from your marital income.

The sole proprietorship should be reported in schedule C, one of the attachments to the income tax return form 1040. You can find the schedule C form and instructions for filling it out at the IRS website.

At the state level, Robinson says that Michigan takes your gross adjusted income from the federal tax return, so there shouldn't be any other tax paperwork to file regarding your sole proprietorship.  To top of page

Photo Galleries
What being middle class means to me For some Americans, middle class means feeling secure. For others, it's just the opposite. More
The 10 most valuable global brands Apple has the most valuable brand in the world, up 67% over the last year, according to a BrandZ ranking. More
A life's work: Photos by Mary Ellen Mark The subjects of Mary Ellen Mark's photography ranged from celebrities to world leaders to those at the fringe of society, including prostitutes and the homeless. More
Sponsors