Hello! I have a small business- a sole proprietorship- I sell art on Etsy and have some workshops or one time courses. I got a letter from IRS that I filled the wrong form and had to fill a 1041 -U.S. Income Tax Return for Estates and Trusts- I looked at the form and have no idea how to fill it! I opened this business in October 2016 and I gained 235 dollars and paid 12.83 dollars sales and tax in 2016, nothing else. Can someone please tell me where do I have to write this on the form?

you said you had to fill a 1041 -U.S. Income Tax Return for Estates and Trusts; A 1041 form is an income tax reporting form that an estate or trust files. The IRS requires the estate or trust manager to file this form each year. With some types of trusts, the income passes through directly to the beneficiaries so the trust or estate doesn't pay any taxes itself, but the trust still has to file an income tax return. The trust must file this form if it has any income tax liability, even if it earns less than $600. The trust must also file Form 1041 if it earns more than $600 in gross income, even if none of this income is subject to trust income taxes. I guess youactually donot need to fiel your return due to lower income; as a spole owner youneed to file Sch C of 1040 asongas the amount online 29 / 41 is $400 or exceeds $400

The 1040 looks much easier to fill. But now, I have a bigger problem; IRS says that their records indicate that I am a Trust and I have to fix that problem. I will call them and ask how we can change it to s.p. tomorrow. Thank you for taking time and informing me.