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Schedule C - Profit or Loss from Business - For Form 1040

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Definition:

Schedule C - Profit or Loss from Business is a report that is part of an individual income tax report on IRS Form 1040. Schedule C shows the income of the business for the tax year and deductible expenses, with the resulting net income/loss (net profit or loss) of the business.

The net profit (loss)from line 31 of the Schedule C is entered into several other personal income tax forms:

  • Line 12 of Form 1020, to determine personal income tax liability for any profit or reduction in personal income tax from any loss
  • Line 2 of Schedule SE to determine self-employment taxes payable.

You must file a separate business tax report for each business you own.

Preparing Schedule C:

Using Schedule C-EZ
If you are a very small business with under $5000 in business expenses, you may be able to use Schedule C-EZ, to save time in tax preparation.

More information on Schedule C, including instructions on how to prepare, when you can use Schedule C-EZ, and more.

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