A Look at the Self-Employed

The IRS just released the summer edition of its Statistics of Income Bulletin (pdf) and it includes one article on the self-employed, along with a couple of data tables. From a summary of the article:

For Tax Year 2007, there were about 23.1 million individual income tax returns that reported nonfarm sole proprietorship activity, a 4.7-percent increase since Tax Year 2006. Reported profits for these sole proprietorships were $280.6 billion in 2007, representing a decrease of 1.8 percent (in constant dollars) since 2006. Profits also decreased 0.4 percent (in constant dollars) between Tax Years 2005 and 2006. This was the first time that profits (in constant dollars) have decreased for 2 consecutive years since before 1988.

Professional, scientific, and technical services had the largest profits of any sector in 2007, at $71.6 billion, representing 25.5 percent of total sole proprietorship profits. The largest sole proprietorship industrial sector, based on business receipts, was construction, which accounted for 17.4 percent of receipts and reported a 2.4-percent decrease in 2007. Finance and insurance showed the largest percentage increase in both receipts and deductions, reporting a 14.1-percent increase in receipts and a 17.3-percent increase in deductions. Real estate and rental and leasing, which reported the largest decline in profits in 2006, at 18.5 percent, reported a 17.7-percent decline in profits in 2007.

Interested readers may also find the article on S Corps (2006 data) interesting as well.