With so many people leaving conventional workplaces for entrepreneurial endeavors nowadays, IRS Schedule C is one of the most popularly used forms. Anyone who does any activity, business or job that is done for the main purpose of income and making a profit needs to attach this schedule to their 1040 Income Tax form when filing their yearly taxes. Hobbies, or activities done sporadically and not for the sole purpose of income, are exempt.
The instructions for IRS Schedule C are all inclusive, easy to follow and most people should be able to find all their questions answered somewhere in the publication. For those who need additional information or questions, I would suggest using an online tax preparation service.
Following the intro section, Schedule C has small sections on what‘s new and any other changes. For example in 2012, the mileage amount for business mileage tax deduction is 55.5 cents and the Heavy Vehicle Tax (for vehicles operating for business purposes on the highways that weight over 55,000 pounds or more) has been extended to 2017. Also, no separate card reporting is required any longer for business payments received from PayPal or credit or debit cards.
The general instructions section lists other schedules and forms you may need with descriptions. Some of the most common are:
- Schedule A, Deductions not related to business income
- Schedule E, Rental and Royalty income
- Schedule F, Farming Profit & Loss
- Schedule J, Income Averaging for Farming or Fishing income
- Schedule SE, Self-Employment Tax on Income
- Form 3800, General Business Credits
- Form 4562, Depreciation
- Form 4684, Theft and Casualties
- Form 8829, Deductions for Home Office Use
The rest of the Schedule C Instructions will explain the form line by line, give examples of other expenses and show the professional activity codes that apply to principal businesses. You can be guided step by step through the instructions of filing a schedule C if you use an online service such as TurboTax Online.