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Five Steps to Filing Your Small Business Tax Return on Schedule C

Do-It-Yourself Tax Return, Including Schedule SE for Self-employment Taxes


Updated March 03, 2013

Filing Your Small Business Taxes on Schedule C - 5 Steps to Do-It-Yourself Filing

Small business owners (sole proprietors and single-member LLC owners) file their business taxes along with their personal taxes. Schedule C is used to calculate the amount of net income for the business, and this net income is added to other forms of income on the personal tax return. Tax is paid on the net income, and self-employment tax (Social Security and Medicare tax) is also calculated on Schedule SE and paid by the business owner, along with income taxes on other income.

Here are five steps to filing your small business tax return on Schedule C and Schedule SE for self-employment taxes.

Step One: Get the forms you need. You will need Schedule C to calculate business income and Schedule SE to calculate self-employment tax. You can download and print these income tax forms from the IRS website. Note that you can also download and print or view the instructions for both forms.

Step Two: Complete the forms. Both Schedule C and Schedule SE are "fillable" forms. That is, you can complete them online, save a copy, and print out the copy. Be sure to save the copy where you can find it if you have to make changes. You can also use my instructions for a simple version of both Schedule C and Schedule SE.

Step Three: Add to Your Form 1040 Add your business income and self-employment tax information to your personal tax return, on Form 1040.

Step Four: Check for errors. Review these common tax return errors to be sure your return is completely accurate. The IRS will send it back to you if it has errors.

Step Five: File Your Return If you are using tax software or a tax preparer, you can use E-File. If not, you will have to mail the return to the IRS. Make sure your return is received on time, according to IRS requirements for receipt of tax returns.

That's it.

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