Where would statutory employee income and expenses be reported?

Statutory employees are a specific category of workers who, while not considered traditional employees, have a unique relationship with their employers that allows them to report their income and expenses differently than regular employees. For statutory employees, their income and any related business expenses are reported on Schedule C, which is used for sole proprietorships and self-employed individuals to report income and expenditures related to their business activities.

When statutory employees receive a Form W-2, their wages are indicated in box 1, but they also have the ability to deduct certain business expenses that are directly related to their work. This is where Schedule C comes into play, allowing statutory employees to detail their income, associated costs, and calculate their profit or loss for the reporting year.

This reporting ensures that the statutory employees can effectively manage their tax obligations while appropriately accounting for their business-related expenses. In contrast, choices like Form 1040, Schedule SE, and Form W-2 pertain to aspects of taxation that don't directly allow for the listing and deduction of business expenses in the same manner that Schedule C facilitates for self-employed work or statutory employment.