Properly reporting your business income to the Internal Revenue Service is one of your most important obligations as a small business owner. If you use an assumed business name, also known as a "doing business as" or DBA, the way you file your business income taxes depends on the way your company is legally structured.
Businesses are formed under state law which requires every business to operate under a legal name that distinguishes it from any other business operating in the state. This requirement ensures that the public is able to properly identify the legally responsible party doing business under a particular name. If a business wants to operate under a name that is not its legal name, it must register a fictitious business name, also known as a DBA, with a state agency. Any type of business can use one or more DBAs, including a sole proprietorship, partnership, limited
liability company or corporation, as long as the DBA is registered in the state where it will be used according to the state's registration procedures.
The legal business name of a sole proprietorship is the name of the owner. An owner can register a DBA so the business has its own name which the proprietor can use to build brand name recognition. However, sole proprietors are required by the Internal Revenue Service to report business income and expenses on the owner's personal income tax return. The Form 1040 tax return is filed under the owner's name, and he uses Schedule C to report his business affairs. On Schedule C, the owner's name goes at the top of the form, while section C requests the name of the business, which would be the sole proprietorship's DBA. The same process would apply for a single-member LLC that is taxed as a sole proprietorship.