How is tax determined for Sole Proprietors?

[wxoklp]

I am a Sole Proprietor in business. Last month, before expenses, I grossed $10,000. After expenses, my net income is $8000. Am I taxed from the IRS on the $10k or on the $8k?

[Reverse Mortgage]

I once taught a graduate tax class about choosing between an LLC and an S corporation. Probably for this reason, people frequently ask me about which entity form they should chose.

[protaxcare]

I think its the $8,000 income you have....

[angel07]

The tax you'll gonna pay will be based on your monthly income or business income theres a fixed percentage for it

[Hosanna]

It's tough to have a precise definition for "personal property" as it is very much a legal term. The concept is perhaps best understood with a comparision to real property. Under common law systems it is possible to place a mortgage upon real property.

[BrianThompsonLaw.com]

The income tax will be based on your net income. If this income was earned by you as a sole proprietor rather than a business entity (Corp. or LLC), you will include a Schedule C on your personal federal 1040 form.

[Jabs24]

You will pay taxes on your gross income. However, if you itemize, you can still list your expenses to obtain deductions, thus lowering your overall tax liability.

[wilonabretel]

The main difference between reporting income from your sole proprietorship and reporting wages from a job is that you must list your business's profit or loss information on Schedule C (Profit or Loss from a Business), which you will submit to the IRS along with Form 1040.
You'll be taxed on all profits of the business - that's total income minus expenses - regardless of how much money you actually withdraw from the business.
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[Wheelie]

The IRS is going to tax you for the $10,000. They want to get all they can get. I must say, though, that is a good business going for you if you are bringing in that kind of money every day.