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
Tech's highest paid women Silicon Valley isn't known for its diversity, but it is home to a handful of highly paid female executives. More
9 reasons to be hopeful about women in tech These startups are working to leverage technology to level the playing field for minorities and women in tech. More
10 best states to retire in Forget Florida. Residents of these states are happy, safe, and have good health care -- all for the right price. More
Sponsors