What type of income is reported on Schedule C?

Schedule C is specifically utilized for reporting the profit or loss from business activities for sole proprietors or single-member LLCs. When individuals operate a business as a sole proprietor, they need to report their income and expenses related to that business on this particular form. This includes income from selling goods or services, as well as allowable business expenses that can reduce the taxable profit.

The other types of income listed do not belong on Schedule C. Capital gains from investments are reported on a different form, specifically Schedule D. Wages and salaries are reported on Form 1040, as they come from employment rather than self-employment activities, and rent and royalties are reported on Schedule E, which is designated for rental income and certain types of income from royalties but not for business income. Thus, profit or loss from business activities is the only type of income correctly reported on Schedule C.