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:
- To prepare Schedule C, you will first need to gather documents, including information from profit and loss statements and information on business expenses.
- Then, use this article to see how to prepare Schedule C
- Finally, you will need to include Schedule C information on your personal tax return.
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.