Fundamentals Of Accountancy, Business, And Management (FABM) 2 Practice Exam

When you file an annual tax return, the form you use depends on where your income comes from. If your income is earned purely from a business or professional practice, you use Form 1701A. This form is designed for self-employed individuals and professionals, and it focuses on net income after allowable business or professional deductions, with the tax computation laid out for that income type. In contrast, Form 1700 is for those with income mainly from employment (compensation) and has withholding already done by an employer. Form 2316 is the certificate of tax withheld on compensation. Form 1701 is used when there’s mixed income—such as income from salary plus business or professional income. The choice of form aligns with the source of your income, so using Form 1701A is the best fit when you earn only from business or professional activities.