Did you make money on the side this year? Or did you quit your wage job and start your own business? How about weekend odd jobs for neighbors where cash was accepted? If you said yes to any of these questions, it means you are self employed and you’ll have to fill out Schedule C when you do your taxes.
Schedule C is called Profit or Loss from a Business. If you are self-employed, you will need to fill out this tax form and attach it to your IRS 1040 when filing your federal taxes. You can list expenses and you may come up with a net loss, but the form still has to be submitted with your Federal Income Tax form.
The Schedule C-EZ
Great news, there’s an easy (EZ) form of the Schedule C. Here’s how to qualify for using the simpler form:
- you are a sole proprietor
- you had less than $5000 in business expenses
- had a net profit
- no business inventory
- no employees
- no home-office deduction