Aug 17 2011
Reporting Business Income and Deductions, Schedule C
Reporting Business Income and Deductions, Schedule C
Each year sole proprietors have the chore of preparing and filing Schedule C with their 1040 to show the IRS whether their business had a taxable profit or deductible loss. (If your business expenses were $5,000 or less for the year, you may qualify to file the short form, Schedule C-EZ.) Schedule C can seem daunting, but if you plan ahead and keep good records, filling it out will be easier. We’ve broken down the form into sections, so you can see what the IRS expects from you and what records you’ll need at tax time.
Part I: Income
In this section, you calculate your gross income. Start by reporting gross receipts or sales for the year, along with any amounts on Forms 1099 that you were issued by clients or others to whom you provided services
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