The default form of a one-owner business with no entity election: the owner and the business are the same taxpayer, income is reported on Schedule C, and all profit is subject to self-employment tax.
It is the simplest structure and the most exposed: no liability shield and the highest employment tax burden. Most owners start here and move to an LLC for protection and an S election for tax once profit justifies it.
Not federally. A state or local business license, a DBA if you use a trade name, and a sales tax permit if you sell taxable goods may apply.
Source: IRS Publication 334
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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