Intuit Academy Tax Practice Exam 2025 – All-in-One Guide for Exam Mastery!

Self-employment income primarily refers to income generated from activities carried out as an independent business owner or self-employed individual. This includes money earned from operating a business, whether it is a sole proprietorship, partnership, or some other form of independent enterprise. The income can come from services offered, goods sold, or any business operations undertaken.

In contrast, wages earned from an employer are considered salary or compensation for employment and are not classified under self-employment income. Interest and dividend payments represent income derived from investments rather than from self-owned businesses, and therefore, they do not qualify as self-employment income. Similarly, pension distributions are funds received as retirement income from past employment and do not arise from current self-employed activities.

Thus, the correct answer identifies the essence of self-employment income, which is directly related to the operation of a business, clearly setting it apart from the other types of income mentioned.