What form is used by sole proprietorships to report their business income?

Sole proprietorships report their business income using Schedule C, which is attached to the individual owner's Form 1040. Schedule C allows the sole proprietor to detail their business income and expenses, thereby calculating the net profit or loss from the business activities. This net income is then transferred to the Form 1040, where it is combined with other income sources for the individual’s total taxable income.

Sole proprietorships do not use Form 1065, which is designated for partnerships to report their business income and is not applicable to sole proprietors. Similarly, Form 1120 is designated for C corporations, while Schedule SE is used to calculate self-employment tax but does not serve as the primary reporting mechanism for business income. Thus, Schedule C is the correct form for sole proprietorships to report their business income.