Introduction This publication explains general tax information of interest todirect sellers. For example, it covers how to treat income, expenses,and other items related to having a direct-sales business. It alsoillustrates two filled-in tax forms that most direct sellers must filealong with Form 1040. They are Schedule C (Form 1040), Profit orLoss From Business, and Schedule SE (Form 1040),Self-Employment Tax. Who is a direct seller?Some of the characteristics that identify direct sellers are listedbelow. A more complete discussion is contained under the headingWho Is a Direct Seller?, later. How you sell. You sell consumer products toothers on a person-to-person basis, usually working out of your home.Or, you deliver or distribute newspapers or shopping news. Where you sell. You may sell door-to-door,through the sales party plan, or by appointment in someone else'shome. When you sell. You may sell on a regular basis oronly occasionally. You may sell full-time or part-time, such as asideline to a regular job. Who is not a direct seller?You are not a direct seller if you are employed in a store, sellthrough a retail sales outlet, or sell your employer's product awayfrom the employer's place of business.