Which of the following constitutes self-employment income?

Self-employment income is defined as income generated from a business or trade that a person operates independently. Income from a sole proprietorship fits this definition perfectly because when an individual operates a sole proprietorship, all earnings from that business are considered self-employment income. This includes revenue generated from goods sold or services provided.

In contrast, wages from a job are earned as an employee and not from self-employment; they are subject to different tax treatments. Social Security benefits are payments provided by the government based on an individual’s earnings history and are not derived from business activity, while dividends from investments refer to earnings received from shares owned in a corporation and similarly do not relate to self-employment endeavors. Therefore, income from a sole proprietorship distinctly qualifies as self-employment income.