Grace's sole source of income is from a restaurant that she owns and operates as a proprietorship.Any state income tax Grace pays on the business net income must be deducted as a business expense rather than as an itemized deduction.

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State income tax paid on business net income from a sole proprietorship is not deducted as a business expense on Schedule C but is instead deducted as an itemized deduction on Schedule A of the individual's personal income tax return.

Grace's Sole Source of Income Is from a Restaurant That