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How do I report Self-Employment Income on Schedule C?

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Question
How do I report Self-Employment Income on Schedule C?

Answer

You need to file Schedule C if you earned income from your sole proprietorship (owned your own business, not a partnership or corporation), received a W-2 showing wages and expenses as a statutory employee, received income and deductions from qualified joint ventures, or if you received a 1099-MISC showing earnings in Box 7.

This document will explain how to file Schedule C using online tax software. Gather your business information, including your EIN (if you have one), gross income reports or receipts, expense reports, past depreciation schedules, information about vehicles you used in business and any other information pertaining to your business. Follow these simple steps:

  1. To begin, create an account from our homepage.
  2. Once logged in and taxpayer information is entered, continue to the Income section and select Business Income/Loss  Schedule C from the Income Section Checklist.
  3. Answer the initial questions regarding the name of the business, name of proprietor, business address, etc. Select your business code from the list based on the type of business that you operate.
  4. Select if you materially participated in the business. Simply stated, material participation means that you both invested money and were personally active in the operation of the business.
  5. Enter your Gross Receipts. Do not reduce this amount by any expenses, as these will be asked later. If you are filing a Schedule C because you received a 1099-MISC, leave this line blank, as the amount from the 1099-MISC is already calculated into this form.
  6. If your business deals with inventory, use the next section to figure your Cost of Goods Sold. If your business does not deal with inventory, proceed to the next section.
  7. Enter your business expenses.
  8. Use the next section if you have a business vehicle that you are not claiming depreciation for and would like to claim vehicle expenses. You may take either the standard mileage rate or take actual vehicle expenses. You may not take both depreciation and vehicle expenses for the same vehicle.
  9. If you use a portion of your home exclusively and regularly for business use, you may qualify for the Business Use of Home deduction. Use the next section to figure this deduction.

By answering the Schedule C interview questions, your tax return will be done quickly. By selecting to efile your income tax return, you will receive the efile status from the IRS at no time. Efile is only available for current year tax return.

 


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Views: 1728 Created on: Jun 15, 2013
Date updated: Dec 07, 2018

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