Intuit Academy Tax Practice Exam

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Enhance your tax preparation skills with the Intuit Academy Tax Exam. Study with comprehensive quizzes and detailed explanations. Prepare for success today!

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As a dependent, does Taxpayer A need to file Schedule C for their self-employed income?

Yes, for business income
No, as a dependent
Yes, if gross income exceeds $1,000
No, if under 18 years old

The correct answer is: Yes, for business income

For a dependent taxpayer who earns self-employed income, filing Schedule C is necessary to report any business income. This requirement stems from the fact that self-employed individuals must report their earnings regardless of their filing status or dependency status. Schedule C is specifically designated for individuals who are self-employed, allowing them to detail their income and any deductions related to their business operations. In this context, while being a dependent may influence the overall tax situation, it does not exempt the taxpayer from reporting self-employment income. Therefore, if Taxpayer A has self-employment income, they must file Schedule C to accurately report that income to the IRS. This ensures compliance with tax regulations and helps determine the net profit or loss from the self-employment activity, which is essential for calculating the overall tax liability.