On Schedule C (Form 1040). gross receipts minus returns and allowances minus cost of goods sold is Gross profit Gross income Net profit Net income Mark for follow up Question 3 of 35. Taxpayers who are also sole proprietors should keep their personal and business finances separate because: They will not be able to get business loans if they don't have separate accounts. If there are not separate bank accounts, all deposits may be considered business income unless proven otherwise in an The IRS requires separate bank accounts. The bank requires separate bank accounts. Mark for follow up Question 4 of 35. Self-employed taxpayers pay self-employment tax on: The gross profit of the business reduced by 15.3%. The net profit of the business. The net profit of the business reduced by 7.65%. The tentative profit of the business